Cemex LatAm Posts 1Q 2021 US$3.8 Million Net Profit, up from Net Loss in 1Q 2020
Colombia-based Cemex LatAm Holdings reported a US$3.8 million net profit for first quarter (1Q) 2021, up sharply from a US$30.4 million net loss in 1Q 2020.
“Consolidated net sales during the first quarter of 2021 increased 7% on a like-for-like basis adjusted for currency fluctuations, compared to the first quarter of 2020,” according to the company. “Net sales improved in all countries except Panama.”
Cost of sales as a percentage of net sales increased 1.6pp during the quarter, from 59.4% in 1Q20 to 61.0% in 1Q21. The increase was mainly due to higher maintenance costs and higher variable costs in Nicaragua.
Operating expenses as a percentage of net sales decreased 2.7 percentage points during the latest quarter, from 28.3% in 1Q 2020 to 25.6% in 1Q 2021, “driven by our cost savings program,” according to Cemex LatAm.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for 1Q 2021 rose 12% in like-for-like terms, compared to 1Q 2020. EBITDA margin during 1Q 2021 also increased 0.8 percentage points versus 1Q 2020.
“The EBITDA margin expansion was mainly driven by higher volumes and lower selling, general and administrative expenses, despite higher maintenance expenses of US$5.7 million during 1Q 2021,” according to the company.
Net debt declined by US$35 million during 1Q 2021, to US$619 million. Free cash flow reached US$26 million in 1Q 2021 versus US$2 million in 1Q 2020.
“The improvement was mainly driven by a positive working capital effect and higher EBITDA,” according to Cemex. “Our average working capital days were negative during 19 days in 1Q 2021 versus seven negative days during 1Q 2020. Our financial expense decreased by US$2.4 million, or 18%, compared to the same period last year.
Net debt to EBITDA ratio improved to 3.4-times in March 2021, from 3.7-x in December 2020.
As for the rest-of-2021 outlook, “we are giving a strategic CAPEX estimate of US$40 million,” of which “US$35 million is related to the general development of our Maceo [Antioquia] cement plant project in Colombia,” according to Cemex.
In Colombia, the cement/concrete industry “is experiencing robust growth, with the self-construction and infrastructure sectors as the main drivers of demand,” according to Cemex.
“Our cement volumes in Colombia grew 4% [during 1Q 2021], less than the industry in the quarter, mainly due to our pricing strategy and competitive dynamics.
“Our cement prices during the quarter improved by 4%, compared to the same period last year, and by 1% sequentially, in local currency terms.
“Despite the imposition of new [Covid-19 quarantine] containment measures in April, we believe the outlook remains favorable, supported by record home sales, the execution of existing 4G [fourth-generation] highway projects and the roll-out of new infrastructure programs,” the company added.
Central America Results
In Panama, 1Q 2021 cement volumes decreased 11% compared to the same period last year and improved 19% sequentially. “The industry’s cement volumes remained weak during the first two months of the year, but showed signs of recovery in March,” according to the company.
In Costa Rica, “our cement volumes during the first quarter increased 7% due to better activity in the infrastructure and self-construction sectors. Our quarterly cement prices improved 2% compared to the same period last year, and 1% sequentially.
In Guatemala, El Salvador Nicaragua, “our cement volumes during the quarter improved by 16%, reaching the highest levels since 2016. Cement volumes increased in these three countries,” according to Cemex.
“In Guatemala, our cement volumes were driven by strong activity in the self-construction sector, a segment where we have a greater relative presence, as well as a gradual recovery in the formal sector. Our cement prices improved 1% compared to the same period last year and sequentially, in local currency terms.
“In Nicaragua, our cement volumes improved by 17% driven by the self-build sector, as well as government sponsored projects. Cement consumption during the quarter was also supported by the increase in remittances. Looking ahead, socio-political risks in the country could increase due to the presidential elections scheduled for November this year,” the company added.