Cemex Colombia 3Q 2018 Sales Dip, but EBITDA Improves
Cemex LatAm Holdings reported October 25 that its Colombia division saw third quarter (3Q) 2018 sales dip 5% year-on-year, to US$134 million, but operating earnings before interest, taxes, depreciation and amortization (EBITDA) rose 11%, to US$26 million.
Gross profit also rose 11% year-on-year in Colombia, to US$53 million, while operating margin rose 15.9% year-on-year, hitting 19.4%, according to the company.
Meanwhile, for the first nine months of 2018, Colombian sales fell 8% year-on-year, while operating EBITDA here fell 12%, according to the company.
Volume sales of grey cement fell 8% year-on-year in 3Q 2018, while concrete sales fell 11% and sales of aggregates also fell 12% during the latest quarter here, according to the company.
Despite the year-on-year declines, “cement volumes increased 7% sequentially during 3Q 2018, reflecting the acceleration of industry demand after the [Colombian presidential] elections,” according to the company.
“Our EBITDA margin improved by 3.5 percentage points during 3Q 2018, due to higher prices, lower costs for cement maintenance and non-recurring effects that negatively impacted our 3Q 2017 results, partially offset by higher freight costs and lower volumes.”
Meanwhile, construction permits for Colombia’s social-housing market have increased by double-digits. This should boost demand for cement, the company noted.
“The new government recently announced the pillars of its housing strategy in the next four years, with a goal building 1 million new housing units in this period, or approximately 250,000 per year, including a new lease-with-purchase option and a new home-improvement program, along with other initiatives,” Cemex noted.
“During fourth-quarter 2018, we expect the residential sector to stabilize, supported by low interest rates, as well as improvements in the consumer confidence indicator and the home-purchase intention indicator.”
As for Colombia’s highway-infrastructure-building sector, “we continue shipping our products to several ‘4G’ [fourth-generation highway] projects that include the ‘Mar 1’ highway [in Antioquia], the Magdalena 2 highway, the Bucaramanga-Barranca-Yondó highway and the Bucaramanga-Pamplona highway,” according to Cemex.
“We estimate that 4G projects will demand 430,000 cubic meters [of cement] in total for 2018, of which we already have 130,000 cubic meters [in market share] and we expect to supply approximately 30,000 cubic meters more during 4Q 2018.
“We expect the infrastructure sector to increase by double digits during 4Q 2018; our volumes should continue to be supported by projects under execution,” the company added.