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Cemex Plant in Maceo, Antioquia Cemex Plant in Maceo, Antioquia Source: CLH

Cemex LatAm Posts Full-Year 2022 Net Loss

Published in Companies Written by  February 13 2023 font size decrease font size increase font size 0
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Colombia-based multinational cement/concrete producer Cemex LatAm Holdings (CLH) on February 13 posted a full-year 2022 net loss of US$185 million -- far worse than the US$28 million full-year net loss posted in 2021.

Despite the worsening losses, sales actually increased 4% year-on-year. On the other hand, operating earnings before interest, taxes, depreciation and amortization (EBITDA) declined 21% year-on-year, to US$131 million, according to the company.

Free cash flow also fell into the red, at a negative US$83 million for full-year 2022. “The decline on a year-over-year basis was mainly due to lower EBITDA, higher capex, working capital investment and taxes, as well as a negative effect from discontinued operations,” according to the company .

On the other hand, CLH “received an approximate total consideration of US$325 million related to the divestment of its aggregate majority ownership of Costa Rica and El Salvador operations during the third quarter of 2022. The proceeds of the divestments are not shown in the free cash flow lines.”

Corporate net debt declined by 41% year-on-year -- by a total of US$238 million -- mainly due to the divestment of Costa Rica and El Salvador operations, the company added.

As for fourth quarter (4Q) 2022 results, net loss worsened year-on-year, to US$115 million, compared with a loss of US$17 million in 4Q 2021.

Consolidated net sales during 4Q 2022 rose 10% year-on-year. “Higher prices and increased ready-mix volumes were the main drivers of the improvement,” according to CLH.

Cost of sales as a percentage of net sales increased by 5 percentage-points, from 63.6% in 4Q 2021 to 68.7% in 4Q 2022. “The increase was primarily due to higher variable costs, mainly in kiln fuel,” according to the company.

As for Colombia operations, "our domestic gray cement prices in local-currency terms improved by 11%, and our volumes increased by 2%, during the fourth quarter on a year-over-year basis,” the company explained.

“In the ready-mix business, our prices and volumes improved by 7% and 5%, respectively, during the fourth quarter on a year over year basis. Our volume growth during the quarter and the full year was supported by increased market demand in the formal sector, and the recent investments to increase our ready-mix footprint.”

As for Panama operations, “our volumes for domestic gray cement and ready-mix increased by 5% and 74%, respectively, during the fourth quarter on a year-over-year basis. Despite the improvement, domestic industry volumes in 2022 were still below those of 2019,” the company added.

As for its remaining operations in Guatemala and Nicaragua, “our domestic gray cement volumes declined by 7% during the fourth quarter on a year-over-year basis,” according to the company.

“In Guatemala, our cement volumes declined by 4% during the fourth quarter on a year-over-year basis. Our cement volumes declined due to a slowdown in the construction sector and challenging competitive dynamics.

“In Nicaragua, our cement volumes declined by 12% during the fourth quarter on a year-over-year basis. The decline was largely attributable to reduced activity in the construction sector and heavy rains,” the company added.

Corporate-wide, CLH foresees cement volume sales in 2023 essentially unchanged from 2022, although ready-mix volumes are likely to rise in the “high single digits” in Colombia, by more than 25% in Panama and by “mid-teens” hikes in its remaining Central America markets.

On a related front, sister company Cemex Spain recently proposed to acquire the outstanding shares of CLH, with closing expected later this year.

Read 419 times Last modified on Last modified on February 13 2023

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