Cemex Net Sales Drop Amid Challenging Global Economy

Cemex announced that, on a like-to-like basis for the ongoing operations and adjusting for foreign exchange fluctuations, consolidated net sales decreased by 3% to $3.5 billion during the second quarter of 2019. The company stated that the decrease was due to lower volumes in all of its regions except for the U.S., partially offset by higher prices for its products.

During the second quarter of 2019, controlling interest net income was $155 million, versus $376 million in the prior-year period. Operating EBITDA decreased by 14% on a like-to-like basis during the quarter to $644 million on a year-over-year basis.

“The second quarter was impacted by the challenging global economic environment,” said Fernando A. Gonzalez, CEO of Cemex. “Weaker-than-expected industrial activity and continued trade conflicts have resulted in lower investment in several of our markets. Mexico in particular has been affected by these factors, which led to lower-than-expected volumes. Adverse weather in the United States also translated into muted activity during the quarter. In contrast, we are very pleased with the favorable performance of our Europe region.”

Gonzalez added, “We continue our focus on pricing strategies and operating efficiencies in order to grow our EBITDA and expand our EBITDA margin. We anticipate our EBITDA generation to increase during the second half of the year, driven by expected improved government spending in Mexico, better pricing levels in addition to higher cement volumes in the U.S. and Europe, moderation in energy headwinds, as well as higher contribution from our ‘A Stronger Cemex’ plan.”

Net sales in Cemex operations in Mexico, on a like-to-like basis, decreased 14% in the second quarter of 2019 to $752 million. Operating EBITDA in the region, on a like-to-like basis, declined by 25% to $245 million in the quarter, compared to the prior-year period.

The company’s operations in the United States reported net sales of $1,032 million in the second quarter, an increase of 4% from the same period in 2018. Operating EBITDA in the region decreased by 12% to $184 million from $211 million in the prior-year period.

Operations in the South, Central America and the Caribbean region reported net sales of $424 million, representing a like-to-like decrease of 3% over the same period of 2018. Operating EBITDA, on a like-to-like basis, decreased by 14% to $93 million in the second quarter of 2019, compared to the same period of 2018.

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