GCC reports a 7% decline in net sales

Mexico’s Grupo Cementos de Chihuahua (GCC) reported a 6.8 per cent YoY decline in consolidated net sales to US$281.1m for the third quarter of 2020, compared with US$301.7m in the 3Q19.

The fall was primarily due to decreased cement volumes in the US, concrete volumes in Mexico and the depreciation of the Mexican peso, according to its earnings report. However, it was partially offset by higher cement volumes in Mexico and a favourable price environment in both markets.

Consolidated net sales in the 9M20 remained unchanged at US$705.3m against the prior year period.

Enrique Escalante, GCC's CEO, stated: "GCC had a steady EBITDA growth, a strong free cash flow generation and margin expansion, showing once again, the continued and successful execution of a comprehensive plan to reduce costs and expenses."

"We experienced mixed demand for our products in most of our markets in Mexico and the US; however, both exceeding our expectations from the beginning of the COVID-19 pandemic."

US sales represented 77 per cent of GCC's 3Q20 net sales but decreased eight per cent YoY to US$217.3m. This was due to a 14.6 per cent fall in cement volumes, which was itself partially offset by a 2.7 per cent and 3.6 per cent price increase in cement and concrete, respectively. The decrease in cement sales volumes was due to a tough comparison against a record third quarter last year and a global drop in oil well cement volumes.

Mexico sales decreased 2.7 per cent in the third quarter of 2020 to US$63.9m, on the back of a four per cent decline in concrete volumes. This was partially offset by an 8.1 per cent rise in cement volumes and a 1.3 per cent increase in cement prices, reflecting an increase in bagged cement sales. The country’s sales were heavily impacted by the depreciation of the Mexican peso.