Cemex Colombia 2Q 2018 Operating EBITDA, Sales Dip Year-on-Year
Cemex Latam Holdings — a division of Mexico-based cement giant Cemex — announced July 26 that second-quarter (2Q) 2018 operating earnings before interest, taxes, depreciation and amortization (EBITDA) for its Colombia operations dipped 4% year-on-year, to US$21.6 million.
Sales in 2Q 2018 in Colombia also dipped 5% year-on-year, to US$129 million, while operating cash flow dipped to US$22 million, from US$23 million in 2Q 2017, according to the company.
Colombian sales volumes of cement, concrete and aggregates all fell between 9% to 13% year-on-year, mainly because of weakness in Colombia’s construction sector, according to the company.
However, year-on-year deliveries of cement for highways and infrastructure sectors were actually improving during the latest quarter, the company added. Meanwhile, prices for gray cement in Colombia during 2Q 2018 rose 8% year-on-year (measured in Colombian pesos).
As for the current situation facing Cemex Colombia’s in-limbo cement plant at Maceo, Antioquia (see: “Cemex Colombia Loses Appeal on Price-Fixing; Former Execs Charged in Maceo Plant Scandal,” Medellin Herald, June 22, 2018), Cemex revealed that it’s now trying to work-out a new lease-extension deal with Colombia’s Sociedad de Activos Especiales (SAE) for lands around the Maceo plant.
SAE supplanted the now-liquidated Direccion Nacional de Estupefacientes (DNE) agency, which originally had moved to seize lands around the plant because of alleged tax fraud by the former owner of the properties.
Since then, Cemex Colombia had enjoyed a temporary “lease contract” with DNE to continue construction and an eventual planned-but-not-yet-executed start-up for the plant. But that contract expired July 15, 2018.
“Despite the expiration of the validity of the lease agreement, Cemex Colombia estimates that the lease agreement has the benefit of a renewal prerogative that operates in accordance with the terms and conditions of the lease agreement and by the Ministry of Justice, and that we also have the right to continue using Maceo’s assets in accordance with the terms [of the original lease] until the end of the domain termination process,” according to Cemex Colombia.
“Although the SAE questions the validity of the documents signed by the DNE, the SAE and Cemex Colombia continue to work on a long-term scheme that allows the Maceo plant to be commissioned while the extinction-of-domain process [that is, the economic seizure of property assets due to the tax-fraud allegations] is resolved,” according to the company.
