CEMEX pleased with second-quarter results
Chief executive says controlling net income during the quarter was the highest for six years
CEMEX’s consolidated net sales reached US$3.8 billion during the second quarter of 2015, an increase of 5% on a like-to-like basis for ongoing operations, compared with the comparable period in 2014, while operating EBITDA increased by 13% to US$744 million on a like-to-like basis during the quarter, and operating EBITDA margin grew by 1.7% on a year-over-year basis to reach 19.4%.
CEMEX said the increase in consolidated net sales was due to higher products prices in most of their operations, as well as improved volumes in most of their products in Mexico, the US, and the Northern Europe and Asia regions. The increase in operating EBITDA was mainly due to higher contributions from the US, Mexico and Asia.
During the second quarter of 2015, controlling interest net income was US$114 million, an improvement of 50% over an income of US$76 million in the same period last year and the highest since the third quarter of 2009. Operating earnings before other expenses in the second quarter increased by 9%, to US$496 million.
Fernando A. Gonzalez, CEMEX’s chief executive officer, said: ‘We are pleased with our results. Our controlling interest net income during the quarter was the highest in six years. In addition, our operating EBITDA grew by 13% on a like-to-like basis. This is the third quarter with double-digit, like-to-like growth in EBITDA.
‘On the financing side, we are pleased to announce that we have commitments from 19 financial institutions to fully repay approximately US$1.94 billion outstanding under our Facilities Agreement maturing in February 2017. The new debt is expected to have a final amortization in 2020 and benefit from a lower interest rate, which is expected to initially represent savings in our financial expense of close to US$20 million annually.’
Meanwhile, Fitch Ratings, one of the global leaders in credit ratings and research, have upgraded CEMEX’s Issuer Default Ratings (IDRs) to BB– from B+.
According to Fitch ‘the upgrade is supported by the strengthening of CEMEX’s capital structure during the past two years due to the conversion of about $820 million of convertible bonds to equity plus the refinancing of around $8.6 billion of debt that has lowered the company’s annual interest expense by approximately $200 million per year. Also factored into the improvement is the US cement market, which has more than offset weakness in other divisions’.
Mr Gonzalez said: ‘We are pleased with the upgrade received from Fitch Ratings, which is in line with our plan of returning to an investment-grade capital structure.’
In addition to the upgrade of CEMEX’s IDRs, Fitch have also upgraded the company’s national scale to A–(mex) from BBB (mex) and the short-term national scale rating to F2 (mex) from F3 (mex), which will allow CEMEX potentially to access the institutional Mexican bond market. Moreover, according to Fitch, the company’s rating outlook remains stable.
