Displaying items by tag: Cemex
Cemex announces return to positive income in 2015
04 February 2016Mexico: Cemex has announced its results for the fourth quarter and full year 2015. On a like-for-like basis, for ongoing operations and adjusting for currency fluctuations, consolidated net sales increased by 2% during the fourth quarter of 2015 to US$3.4bn. They rose by 5% for the full year to US$14.1bn. Operating earnings before interest, tax, depreciation and amortisation (EBITDA) (also on a like-for-like basis) increased by 7% during the fourth quarter to US$663m and went up by 9% for the full year to US$2.6bn.
The increase in consolidated net sales, on a like-to-like basis, was due to higher prices of Cemex's products, in local currency terms, across most of its operations, as well as higher volumes in the US, the Mediterranean and Asia. On a like-for-like basis, operating earnings before other expenses, net, in the fourth quarter increased by 11% to US$410m and in the full year increased by 17% to US$1.7bn versus the same periods in 2014.
Fernando A Gonzalez, Cemex Chief Executive Officer, said, "Despite a challenging macroeconomic environment, which has affected many of our markets, our industry and Cemex in particular, we have been able to meet these challenges and deliver strong operating and financial results, on a like-to-like basis."
"Our full-year net income was positive for the first time in six years. In addition, our operating EBITDA increased by 9%, on a like-to-like basis, reflecting our cost-reduction program of US$150m as well as a positive operating leverage in several of our markets, which translated into a 1.1 percentage-point improvement in operating EBITDA margin. I am particularly pleased with the growth in our free cash flow after maintenance capex of more than US$480 million, which enabled us to reduce our debt by close to US$1bn during the year."
Sales in Cemex's Mexican operations decreased 19% in the fourth quarter of 2015 to US$672m, compared with US$827m in the fourth quarter of 2014. Operating EBITDA decreased by 10% to US$231m versus the same period of last year.
Cemex's operations in the United States reported net sales of US$967m in the fourth quarter of 2015, up by 5% from the same period in 2014. Operating EBITDA increased 26% to US$173m in the quarter, versus US$138m in the same quarter of 2014.
In Northern Europe, net sales for the fourth quarter of 2015 decreased 18% to US$738m, compared with US$901m in the fourth quarter of 2014. Operating EBITDA was US$71m for the quarter, 14% lower than the same period of 2014.
Fourth-quarter net sales in the Mediterranean region were US$370m, 4% higher compared with US$357m during the fourth quarter of 2014. Operating EBITDA decreased 5% to US$63m for the quarter versus the same period in 2014.
Cemex's operations in South, Central America and the Caribbean reported net sales of US$436m during the fourth quarter of 2015, representing a decrease of 15% over the same period of 2014. Operating EBITDA decreased 25% to US$125m in the fourth quarter of 2015, from US$165m in the fourth quarter of 2014.
Operations in Asia reported a 4% increase in net sales for the fourth quarter of 2015 to US$162m, versus the fourth quarter of 2014, and operating EBITDA for the quarter was US$46m, up by 4% from the same period of 2014.
Mexico: Cemex has contributed to the restoration of the Monterrey-Nuevo Laredo highway, the main export-import route between Mexico and Texas, US. With 52% of Mexico's imports and exports moving along this highway, it is one of the main trade routes across the Mexican and US border.
With more than 15,000/day of trucks using the highway, its repair required extremely resistant and durable construction materials that guarantee road safety. To this end, Cemex supplied 98,000m3 of hydraulic concrete to restore a 15.6km stretch of the highway.
Cemex solved the challenge of paving the road without stopping traffic by utilising different work shifts to minimise the potential effect on this crowded highway and, simultaneously, guarantee correct placement of the hydraulic concrete. The project, which required 30,000t of cement, directly employed more than 100 people.
Peru: The Peruvian division of Mexican cement company Cemex has received approval from the Ministry of Production for the environmental impact assessment (EIA) requested for the development of a cement grinding and packaging plant in Ventanilla, Callao.
Cemex reports 2016 plans
27 November 2015Colombia: Cemex's Colombian business has reported its plans for 2016. The company currently constructs housing in the country, which complements its primary activity of cement production. It has constructed 6000 houses in Colombia to date and now plans to double its income in this segment with the construction of 15,000 additional houses in the near future.
Cemex has also set-up a network of hardware stores called Construrama, of which there are now 220. The company noted the challenge in managing its distribution chain as it now sells more than 4000 products to a variety of clients. The company also plans growth for its concrete, infrastructure, housing and market development divisions in public sector projects and structuring. According to Cemex, the company has formed an alliance with the national government and administrations of municipalities, departments, associations and public institutions to achieve this goal.
Mexico’s Cemex closes Euro160m sale of Austrian and Hungarian units
03 November 2015Europe: Cemex has completed the sale of its business operations in Austria and Hungary to Germany's Rohrdorfer Group for about Euro160m.
Cemex's Austrian operations, which comprise 24 aggregate quarries and 34 ready-mix plants, reported Euro219m in net sales in 2014. The operations in Hungary include five aggregate quarries and 34 ready-mix facilities and had net sales of some Euro42.7m in 2014.
Cemex hired Bank of America Merrill Lynch, Citigroup, BNP Paribas and Morgan Stanley & Co International plc to act as financial advisors in this transaction. The proceeds from the sale will be used mainly to finance general corporate purposes and to pay off debt.
Cemex reports 5% net sales growth in the third quarter of 2015
23 October 2015Mexico: Cemex's consolidated net sales reached US$3.7bn in the third quarter of 2015, an increase of 5% on a like-for-like basis for the ongoing operations and adjusting for currency fluctuations, versus the comparable period in 2014. The increase was due to higher prices in local currency terms in most operations, as well as improved volumes in the US and Asia.
Its operating earnings before interest, taxes, depreciation and amortisation (EBITDA) during the quarter reached US$677m, an increase of 5% on a like-for-like basis versus the same period in 2014. The increase was mainly due to higher contributions from Mexico, the US, as well as from the Northern Europe and Asia regions. Operating earnings before other expenses, net, in the third quarter, decreased by 8% to US$439m. Controlling interest net loss narrowed to US$44m from a loss of US$106m in the same period of 2014.
"Our results reflect the unprecedented strength of the US Dollar versus the currencies in most of our markets, which intensified during the quarter. Despite this, we had favourable operating results. Our quarterly sales and operating EBITDA increased by 5% on a like-for-like basis. While EBITDA margin was relatively flat during the quarter, year-to-date EBITDA margin was the highest since 2009. Our free cash flow after maintenance capital expenditure also increased by 25% during the quarter," said Fernando A Gonzalez, Chief Executive Officer. "We are pleased with the results so far of our 'Value-Before-Volume' strategy. Our year-to-date increase in consolidated prices, adjusted for the impact of our variable costs and freight rate increases, has offset slightly more than half of the effect of foreign-exchange fluctuations."
Panama: Cemex's Panamanian operations have been awarded the highest recognition in sustainable development and environmental management by the Panamanian Chamber of Construction (CAPAC). Cemex Panama earned this honour for its implementation of protection and conservation policies in the environments where it operates.
The award criteria included the company's environmental policies, energy and water efficiency, waste management and the handling of chemical substances; air pollution mitigation; environmental controls and records; environmental contingency plans; and reforestation plans.
Cemex Panama obtained this recognition thanks to such initiatives as its Technological Innovation Project based on P+L Systems, which resulted in energy savings of 32% at its cement plant; its Reduction of Water Consumption Project, which helped reduce its water consumption by over 35%; its waste management and waste-water treatment policies; its Reforestation Project, which will enable the recovery of 633,000m2 of forest by 2019.
"We are very honoured to receive this award, which recognises the integration of environmental management in our daily operations and processes," said Andres Jimenez, President of Cemex Panama. "Sustainability is an integral part of our business model and a core component of Cemex's future growth."
EPA settles major air pollution case with Cemex in Puerto Rico
05 October 2015Puerto Rico: The US Environmental Protection Agency (EPA) has announced that Cemex de Puerto Rico will spend US$1.7m on pollution controls that will reduce emissions of nitrogen oxides. In addition, the company will pay a US$160,000 penalty for Clean Air Act violations.
"Nitrogen oxides emissions can lead to a number of serious health and environmental problems, including respiratory problems, heart disease and smog," said Judith A Enck, EPA regional administrator. "The EPA settlement protects children with asthma and other vulnerable populations from harmful air pollution by requiring that Cemex install state-of-the-art technology and take immediate steps to reduce pollutants."
The Cemex cement kiln system in Ponce has operated for over 20 years and is a major source of nitrogen oxide emissions. The settlement addresses modifications Cemex made to its cement plant without obtaining the proper permit, as required by the Clean Air Act. Businesses that produce large quantities of air pollution are required to obtain permits and install pollution control technology before making changes that would significantly increase emissions.
Following an EPA inspection, Cemex conducted a smokestack test at its Ponce facility and potential violations were discovered. In the settlement, Cemex will install control technology, which will reduce emissions of nitrogen oxides by approximately 1423t/yr.
Cemex Nicaragua receives safety award
01 October 2015Nicaragua: For the seventh year in a row Cemex has been awarded a national prize as a 'leading business' for its industrial safety and hygiene management procedures by Nicaragua's National Council for Work Safety and Hygiene at the Ministry of Labour.
This continued recognition is linked to its programmes that encourage workers to report poor behaviour or unsuitable conditions that could otherwise lead to accidents. Cemex Nicaragua is on the verge of reaching zero incidents through more than 14,000hr of training per year.
Will cement industry growth in the Philippines reveal CRH’s plan?
23 September 2015San Miguel Corporation has upped the pace of its capacity expansion this week to a US$1bn investment towards five new 2Mt/yr cement plants in the Philippines. The announcement builds on its previous plans to build two plants for US$800m. At that time construction had already begun at subsidiary Northern Cement's plant in Pangasinan and Quezon. Plants in Bulacan, Cebu and Davao have now joined the list for completion in 2017.
The scale of this expansion is vast considering that the Philippines has 17 active cement plants with a total integrated production capacity of 24.6Mt/yr. San Miguel president and COO Ramon Ang's comments to media that if there were an oversupply of cement the market would correct itself in a couple of years may sound flippant to anyone who isn't the head of a multi-billion dollar corporation. However, if achieved it will propel the San Miguel subsidiaries from the country's fourth largest cement producer to its largest.
However each of the other major producers also have their own expansion plan in various stages of completion. Holcim Philippines announced US$40m plans in May 2015 to expand its production capacity to 10Mt/yr by the end of 2016, mainly through reviving existing projects. Cemex announced plans in May 2015 to spend US$300m towards building a new 1.5Mt/yr integrated line at its Solid Plant. Lafarge Republic had plans in April 2015 to raise its cement output through the opening of grinding plants at its Rizal and Bulacan cement plants. The former was opened in April 2015 but this is the one plant that hasn't been acquired by CRH following the sale of Lafarge Republic in the run-up to the LafargeHolcim merger. The latter was last reported due for opening in December 2015.
The big change in the Philippine cement industry in 2015 has been the merger of Lafarge and Holcim to form LafargeHolcim. Given that Lafarge Republic and Holcim Philippines held over 55% of the country's production capacity before the merger, it was inevitable that they would be forced to sell off assets. In the end CRH picked up most of Lafarge Republic's cement assets bar the Teresa Plant in Rizal, which stayed with Holcim. The merger has skewed the market towards one clear leader, LafargeHolcim (9.5Mt/yr), followed by Cemex (4.73Mt/yr) and CRH (4.19Mt/yr) with similarly sized cement production bases. These producers are then chased by San Miguel (2.15Mt/yr) and the other smaller firms. If San Miguel succeeds in its expansion strategy then the market will change once again.
Cement sales rose by 11.1% to 11.9Mt in the first half of 2015 according to the Cement Manufacturers Association of the Philippines (CeMAP). They attributed this growth to strong construction activity helped by increases in government infrastructure spending. Alongside this, gross domestic product (GDP) is predicted to rise by 6% in 2015 and 6.3% in 2016 by the Asian Development Bank. Another promising sign for development came from a study by Antoinette Rosete of the University of Santo Tomas which forecast that cement demand would meet 27Mt/yr. Capacity utilisation rates rose to 85% from 68% in 2014 according to Department of Trade and Industry data.
With this kind of encouragement, no wonder San Miguel is betting on such a large expansion project. If Rosete's forecast and capacity utilisation rates hold then the Philippines might need a capacity base of around 36Mt/yr. San Miguel's growth will fill that gap.
Of course other players might have their own ideas about giving away market share. LafargeHolcim and Cemex are likely to be saddled with debt or existing projects. CRH meanwhile is the wildcard as its expansion strategy is opaque. In recent years it has seemed to focus on acquisitions over building its own projects. The Euro5.2bn the company has spent on buying Lafarge and Holcim assets this year seems likely to slow down investment on any internal development plans. However CRH is bringing in local partner Aboitiz in the Philipines to help with a US$400m loan.
The Philippines is clearly an exciting market for the cement industry at the moment. One consequence of the current situation is that it may signal what CRH's global intentions are following the LafargeHolcim merger. If it decides or is able to start building new capacity then it may reveal the start of a new phase for the Ireland-based multinational.