Cemex profits benefit from a lower minorities charge

Cemex' turnover improved by 1.7 per cent in 2018 to US$148,374.6m, while EBITDA eased by 0.6 per cent to US$1557.9m and trading profit fell by 6.9 per cent to US$1420.9m. However, the net interest charge dropped by 37.8 per cent to US$635.6m, as borrowings were reduced, giving a pretax profit 11 per cent higher at US$805.3m. The tax charge was 7.4 per cent after the previous year’s exceptionally charge. Minorities fell by 54.6 per cent, giving a net attributable profit 32.6 per cent lower at US$543.4m. Net debt, including perpetual notes, declined by 5.3 per cent during the year to US$10,089m, with 63 per cent of the debt being at fixed rates, and 65 per cent in US dollars and 27 per cent in euros. Shareholders' funds were ahead and improved by 5.1 per cent to US$9,600.5m, giving a gearing level of 116.6 per cent compared with 95.2 per cent a year earlier. Capital expenditure in 2019 is estimated by the company to be around US$850m, of which US$550m would be for maintenance.

Group cement shipments improved by 1.7 per cent to 69.39Mt while aggregates deliveries were also ahead by 1.7 per cent to 149.82Mt and ready-mixed concrete deliveries were ahead by 2.9 per cent to 53.26Mm³. The number of employees at the year-end was 4.6 per cent ahead at 42,141.

Mexico
The Mexican turnover improved by 6.6 per cent to US$3299.2m and EBITDA advanced by 2.7 per cent to US$1062.2m, but the Mexican EBITDA margin declined from 37 per cent to 35.6 per cent. Mexico generated 31.7 per cent of the group EBITDA, compared with 36.5 per cent. Domestic cement deliveries recovered by around one per cent and Cemex was endeavouring to improve the price further. The commercial and industrial as well as other private developments and housebuilding industries were ahead, but infrastructural demand declined. Aggregates volumes recovered and rose by some 10 per cent. Prices were around eight per cent ahead in local currency and by US$ in five per cent. Ready-mixed concrete deliveries and prices moved in line of aggregates in prices in line with local currency. 

USA
US turnover showed a 7.6 per cent recovery to US$3747.7m and EBITDA improved by an underlying 6.6 per cent to US$643.7m, but the trading profit did advance by 21.5 per cent to US$336m. The recovery in US cement demand weakened during last quarter of the year as demand was affected by adverse weather conditions. Grey cement volumes were still some five per cent ahead over the full year. Cemex did see a price improvement of about three per cent. Deliveries of aggregates recovered by three per cent but came to one per cent in the final quarter while prices advanced by five per cent over the year. In ready-mixed concrete volumes rose by eight per cent in the year as a whole, while prices were ahead by just two per cent.

Latin America
In South America, Central America and Caribbean, turnover declined by 3.5 per cent to US$1780.9m and EBITDA fell by 14.6 per cent to US$403.9m. Cement volumes declined by two per cent, but prices did improve by three per cent in local currency and by one per cent in US dollar. Aggregates volumes fell by 11 per cent and by 14 per cent in the final quarter, while prices were one per cent lower. In ready-mixed concrete volumes declined by 11 per cent while prices were off by two per cent. Colombia is the most important country and here, the cement volume recovered by four per cent and the local price by two per cent. In aggregates volumes fell by 11 per cent and prices by two per cent. In ready-mixed concrete local prices were a bit weaker as volumes dropped by one per cent. In Panama Cemex saw cement deliveries drop by 18 per cent as work on the Panama Canal had been finished, but prices were just one per cent off. Aggregates volumes down by eight per cent, but prices by just one per cent, while ready-mixed concrete volumes fell by 15 per cent and prices by seven per cent. Costa Rica improved volumes by one per cent and pricing by two per cent.

Europe
In Europe turnover improved by 6.8 per cent to US$3756.5m, but EBITDA was very marginally lower at US$362.7m while at the trading level there was 2.8 per cent reduction to US$160.9m. Overall cement volumes were around one per cent ahead, while the average price was two per cent ahead, or four per cent if measured in US dollar. Aggregates volumes were little changed for the year, but the downstream volume was four per cent ahead in local currency and by seven per cent in US dollar. In ready-mixed concrete volumes came off by one per cent, but prices were ahead in single figures. In Great Britain cement deliveries were four per cent lower and the average price was one per cent lower on a weaker currency as well. In aggregates volumes declined by just one per cent and prices improved by two per cent. In ready-mixed concrete volumes declined by five per cent and prices were marginally weaker. In Germany cement deliveries decreased by one per cent, while the average price improved by two per cent. German aggregates volumes eased by two per cent while prices improved by two per cent. In ready-mixed concrete volumes were down by nine per cent, while the average price still improved by six per cent. In Poland cement volumes showed a further seven per cent growth and local prices improved by six per cent. Polish aggregates volumes rose by eight per cent and prices by 21 per cent, while in ready-mixed concrete volumes were four per cent higher and prices rose by 10 per cent.  In France, where Cemex does not sell cement, aggregates deliveries were up by three per cent and prices by a similar magnitude. Ready-mixed concrete volumes were stable and prices improved by four per cent. Spanish volumes improved by four per cent and prices by five per cent, but aggregates volumes rose by 39 per cent, though prices were four per cent lower, while in ready-mixed concrete rose by 34 per cent but prices by just two per cent.

Africa & Asia
The African and Asian turnover recovered by 5.3 per cent to US$1433.8m, but EBITDA declined by 7.6 per cent to US$205.8m. Cement volumes improved by three per cent for the full year but declined by 15 per cent in the final quarter. Prices were seven per cent ahead in local currency terms, but were just four per cent when measures in US dollar. In aggregates, volumes were off by two per cent while prices were three per cent higher. The ready-mixed concrete volume was stable overall and the average price was three per cent ahead. The Philippines is the biggest market and Cemex cement volumes there were ahead by seven per cent, and the overall price one per cent ahead, while prices weakened by some just one per cent. In Egypt there was a stable volume and prices, in US dollar terms recovered by 17 per cent after the 42 per cent fall in the previous year. Aggregates and ready-mixed concrete volumes were down by 312 per cent and 21 per cent respectively.