Cemex Mexico recovery as volumes reach six-year high

Cemex SAB sees a strengthening construction-industry rebound in Mexico, the cement producer’s second-largest market, because volumes may outstrip the company’s 2015 forecast.

Cemex is “encouraged by the performance of our operations in Mexico,” chief executive Fernando Gonzalez said Thursday on a conference call after the company’s earnings report. “Our first-quarter cement and ready-mix volumes were the highest since 2009.”

Construction in Mexico grew at the fastest pace for a two-month period since 2008 in December and January, helping Monterrey, Mexico-based Cemex recover after its near-default in 2009. While first-quarter profit missed estimates, an adjustment for Mexico’s weak currency showed that Cemex is recovering, according to Corporativo GBM SAB.

First-quarter operating earnings before interest, taxes, depreciation and amortization climbed 6 percent to $569 million. Analysts had a median estimate of $584 million for Ebitda at Cemex, the biggest cement maker in the Americas.

“Even though the results were slightly lower than our estimates, I think it was a good report,” Lilian Ochoa, a GBM analyst, said in a telephone interview. “The company’s volumes are recovering, demand is solid in most of the regions and their price increases have been well received.”

Cemex rose 0.8 percent to 15.54 pesos at the close in Mexico City. The shares gained 3.3 percent this year, trailing the 5.3 percent rally for Mexico’s benchmark IPC index.

Mexico accounts for about a fifth of Cemex’s sales, which decreased 5 percent to $3.4 billion, missing estimates for $3.6 billion. Net sales grew 10 percent in the US, the company’s biggest market, and 4 percent in Mexico, Cemex said in its quarterly release.


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