Cemex Colombia 4Q 2017 Earnings Decline Year-on-Year; Maceo Plant in Limbo

Cemex Colombia fourth quarter (4Q) 2017 earnings before interest, taxes, depreciation and amortization (EBITDA) fell 20% year-on-year, to US$30 million, Cemex Latam Holdings (CLH) announced February 8.

Net sales for the CLH-Colombia division also fell 12% year-on-year, to US$134 million, according to the company.

For CLH’s regional operations, “during the fourth quarter [2017] our working capital investment remained in negative territory for seventh consecutive quarter, with minus-14 average working capital days. During this period, we achieved negative trade working capital in our operations in Colombia, Costa Rica, Nicaragua, Guatemala, and El Salvador,” the company explained.

CLH’s net sales in the region for full-year 2017 declined 6% year-on-year, “mostly explained by lower cement volumes and prices in Colombia. As a result, operating EBITDA declined by 15% and 27% during the fourth quarter and the full year, respectively, compared to those of the same periods in 2016,” according to the company.

“Despite the positive traction of our value-before-volume strategy in Colombia, where our cement prices in December were about 3.5% higher than they were in June of 2017, as well as the positive results in Costa Rica and our rest-of-CLH region, during the [fourth] quarter not only cement price levels in Colombia continued well below those of last year, but also national cement consumption in Colombia and Panama remained subdued,” added Cemex Latam CEO Jaime Muguiro.

According to CLH, EBITDA “was negatively affected as our cement prices in Colombia declined by 12% and 19%, in local-currency terms, during the fourth quarter and full year, respectively, compared to those of the same periods in 2016.”

However, “in Colombia, after four consecutive quarters of declines in our cement prices, in local currency terms, they increased by 2% during the fourth quarter, on a sequential basis. Our successful cost containment efforts in Colombia helped us partially offset the negative effect of lower demand for our products in the country,” CLH added.

Maceo, Antioquia Plant Awaits License OK

Meanwhile, Cemex’s US$420 million cement plant in Maceo, Antioquia, continues to lack a crucial operating permit that would enable start-up at its rated capacity of 1.3 million tonnes per year. The company has expressed hopes that the permit snag could be overcome by year-end 2018.