Cemex Colombia 3Q 2019 Cement Sales Grow, but Profits Dip
Colombia-based Cemex LatAm Holdings announced October 24 that its third-quarter (3Q) 2019 sales of grey cement grew year-on-year, but profits declined.
According to Cemex LatAm – which produces and markets concrete and cement in Colombia, Panama, Costa Rica, Nicaragua, El Salvador, and Guatemala – 3Q 2019 produced a corporate-wide net loss of US$4 million, compared to net profit of US$19 million in 3Q 2018.
Operating earnings before interest, taxes, depreciation and amortization (EBITDA) in Colombia fell to US$20 million, down 25% year-on-year in U.S.-dollar terms or 12% lower in Colombian peso terms.
Net sales in Colombia year-over-year declined by 6% in U.S.-dollar terms but increased by 8% in Colombia peso terms, hitting US$127 million.
In Panama, operating EBITDA declined by 18% year-on-year, to US$14 million, while net sales fell 22% year-on-year, to US$45 million.
In Costa Rica, operating EBITDA fell 58% to US$5 million, both in U.S. dollar and local-currency terms. Net sales fell 25%, to US$25 million.
In the rest of its territories, operating EBITDA fell by 15% in U.S.-dollar terms or by 13% in local-currency terms, to US$14 million during the quarter. Quarterly net sales dipped 9% year-on-year, to US$51 million.
“In Nicaragua, the socio-political crisis continues without resolution and continues to affect the local economy including demand for cement,” according to the company. “Most of the highway projects sponsored by the government are in final stages of construccion — and no new projects are replacing the prior projects.”
For Cemex LatAm, corporate-wide consolidated prices in local-currency terms for domestic gray cement and ready-mix concrete declined by 1% and 2% year-on-year, while prices for aggregates increased by 1%, according to the company.
Commenting on the results, Cemex LatAm CEO Jesus Gonzalez said: “We are encouraged by the positive trends in Colombian cement demand and by our cement volume and price performance in this country during the first nine months of the year. Nevertheless, this positive trend in sales was not strong enough to offset the increases in coal, electricity and distribution costs in Colombia, and the much weaker markets across Central America.
“Despite this challenging environment, we are pleased with our free cash flow generation and debt reduction during the first nine months of this year. Our free cash flow reached US$50 million in this period, an improvement of 43% on a year-over-year basis. We reduced our net debt by US$62 million, from US$827 million as of December to US$765 million as of September [2019]”.
