Cemex LatAm 2Q 2021 Net Income Doubles Year-on-Year
Colombia-based Cemex LatAm Holdings announced this morning (July 29) that its second quarter (2Q) 2021 net income more than doubled year-on-year, to US$23.8 million.
Operating earnings before interest, taxes, depreciation and amortization (EBITDA) likewise rose 81% year-on-year, to US$53 million. Net sales – adjusted for currency fluctuations — jumped 54%, to US$228 million, according to the company.
“Higher cement volumes in all countries, as well as higher prices in Costa Rica and the rest-of-Cemex-LatAm-region, were the main drivers of the improvement,” according to the company. “During the same [2Q] period of last year, sales were impacted by Covid-19 restrictions in most of our markets.”
Cost of sales as a percentage of net sales decreased by 3.7 percentage points during the quarter, from 63.4% in 2Q 2020 to 59.6% in 2Q 2021, according to the company.
The big improvement in operating EBITDA during 2Q 2021 “was due to higher contributions from all our countries. Operating EBITDA margin increased by 3.6 percentage points compared with that of the second quarter of 2020. The margin expansion was mainly driven by higher volumes and lower selling, general and administrative expenses, despite higher maintenance expenses and expenses related to the social protests in Colombia,” the company added.
The net income improvement “was mainly driven by higher operating earnings,” while “net debt declined US$6 million from March to June, reaching US$613 million at the end of the quarter,” according to Cemex LatAm.
“In Colombia, the growth momentum observed in industry cement volumes year-to-date April was interrupted by the social protests, mainly during May. We estimate industry activity returned to first-quarter levels in June, as the road blockades and protests gradually eased.
“The housing and infrastructure sectors continued driving demand in the country. We believe the outlook for cement volumes remains favorable, supported by the resilience of the self-construction sector, record home sales, the execution of the existing 4G [fourth-generation] highway projects, as well as the rollout of new infrastructure programs,” according to the company.
“In Panama, our cement, ready-mix and aggregates volumes showed strong growth during the quarter due to an easy base of comparison in the same period of 2020, which was impacted by Covid-19 restrictions. However, industry cement volumes during the quarter remained weak, below those of 2019.
“In Costa Rica, our cement volumes during the second quarter increased by 16% on a year-over-year basis. The positive volume trend in the industry continued during the quarter, mainly driven by the infrastructure and housing sectors. Our quarterly cement prices improved by 4% year-over-year and by 2% sequentially, in local currency terms.
“In the rest-of-Cemex-LatAm region, our cement volumes during the quarter improved by 25% year-over-year and 9% sequentially, reaching record levels. Cement volumes during the quarter increased year-over-year in Nicaragua, Guatemala, and El Salvador.
“Increased remittances supported cement consumption across the region. In Guatemala, our cement volumes were driven mainly by strong activity in the self-construction sector — a segment where we have a higher relative presence — and by a gradual recovery in the formal sector.
“Our cement prices improved by 2% year-over-year and 1% sequentially, in local-currency terms.
“In Nicaragua, our cement volumes were driven mainly by the self-construction sector and by government-sponsored projects. Going forward, socio-political risk in the country could increase due to the presidential elections scheduled for this November.”
As for its rest-of-2021 spending plans, “we are guiding to a strategic capex of US$40 million for 2021. US$28 million is related to the development of our overall Maceo [Antioquia] cement plant project in Colombia,” the company added.