Cemex Latam 4Q 2018 results February 2019

Cemex LatAm 4Q 2018 Net Profits Slip, Colombia Sales Dip

Bogota-based cement/concrete manufacturing giant Cemex LatAm Holdings announced February 7, 2019 that its fourth-quarter (4Q) 2018 region-wide net profits fell 33% year-on-year, to US$10 million, from US$33 million in 4Q 2017.

But full-year 2018 profits improved 36% year-on-year, to US$63 million, from US$46 million in 2017, according to the company, which operates in Colombia, Panamá, Costa Rica, Nicaragua, El Salvador and Guatemala.

As for its Colombia operations, full-year 2018 sales slipped 7% year-on-year, to US$524 million, while 4Q 2018 sales dipped 6% year-on-year, to US$125 million, from US$134 million in 4Q 2017, according to Cemex.

Colombian sales of grey cement for full-year 2018 dipped 6% year-on-year, but rose 4% in 4Q 2018, while Colombian concrete sales fell 11% for full-year 2018 and by 8% in 4Q 2018.

Sales of aggregates in Colombia declined 14% for full-year 2018 and 15% in 4Q 2018 versus 4Q 2017, according to the company.

Cemex foresees 2019 demand for cement in Colombia either flat or rising by 1%, while demand for concrete and aggregates would rise by 1% to 3%, according to the company. Product prices also began to recover slightly in the Colombian market during 4Q 2018, according to the company.

Colombia’s residential-sector demand rose slightly during 4Q 2018, according to Cemex, especially in the “informal” and “self-built” housing segments.

For these lower-income “social housing” sectors, “there are encouraging signs for the future, given that sales and construction permits through September 2018 rose by 5% and 15% respectively . . . supported by continuing government subsidies,” according to the company.

However, the middle- and upper-income housing sectors continue to face challenges as new-starts and housing-permit applications had fallen 18% through September 2018, and inventories in these sectors remains relatively high, at 16-months turnover rate.

As for the Colombian infrastructure sector (highways, airports, tunnels, hospitals, sewage-treatment plants, schools, marine ports), 4Q 2018 demand continued relatively strong, according to the company.

Cemex dispatched its products to 15 “fourth-generation” (4G) highway projects including the “Mar 1” and “Vias del Nus” projects in Antioquia, plus others elsewhere including “Autopista al Rio Magdalena 2;” “Bucaramanga-Barranca-Yondó;” “Bucaramanga-Pamplona;” and “Pasto-Rumichaca.” Cemex achieved 36% market participation in 4G projects during 2018.

For the rest of 2019, Cemex expects demand for cement in Colombian infrastructure proejcts to rise by low-single-digits, including several large road-building projects in Bogota, according to the company.