Displaying items by tag: Cemex
Cemex in 2018
13 February 2019Cemex was the first of the big multinational cement producers to release its fourth quarter results this week. Revenue, sales volumes of cement and gross profit were all up in single digits. Earnings growth was less impressive, with operating earnings before interest, taxation, depreciation and amortisation (EBITDA) rising by 1% year-on-year on a like-for-like basis to US$2.56bn in 2018. This was a decrease of 1% in real terms. Cemex blamed this on rising energy costs and on lower earnings from its territories outside of Mexico and the US.
Figure 1: Breakdown of Cemex’s net sales in 2018 by region: Source: Cemex.
As Figure 1 shows, over three quarters of Cemex’s sales come from Mexico, the US and Europe. Elsewhere its presence is smaller but it does have plants in key countries like the Philippines and Egypt. The former, for example, saw its cement sales rise by 7% in 2018 bringing along the rest of the Asia, Middle East and Africa region into volume growth.
Some other non-financial results to consider lead with the good news that 2018 was the first year ever that Cemex has had without any employee fatalities. This probably doesn’t include contractors or third parties, we’ll have to wait for the next sustainability report to find out for sure, but this is undoubtedly a milestone. Another point of interest was the growth of Cemex Go, its online sales platform. In 2018 it was responsible for around 40% of the company’s sales volumes. Around 85% of its recurring clients use it and it has nearly 30,000 customers. The analytics alone from the system and the potential for further tailoring it towards both customer and company objectives sound promising. Lastly, Cemex was also keen to note its alternative fuels substitution rate of 27% in 2018.
In recent years the other metric that the analysts have been watching is Cemex’s debt. It dropped by 8% year-on-year to US$10.4bn in 2018 compared to a high of US$17.5bn in 2013. Its plan is to reach an ‘investment-grade’ balance sheet by 2020.
In this way Cemex has been ahead of the curve of the major European cement multinationals like LafargeHolcim and HeidelbergCement that have taken on ‘indigestible’ acquisitions more recently. Possibly behind all of these companies is CRH, which has steadily been growing in recent years through acquisitions. It made the headlines this week on the corporate side when Swedish so-called ‘activist investor’ Cevian bought what is thought to be around a 3% stake in the Irish company. The financial press thinks it’s after a seat on the board to try and influence CRH to focus on margins rather than its acquisition strategy. CRH’s EBITDA margin was 12% in 2017 compared to 23%, 19% and 19% for LafargeHolcim, HeidelbergCement and Cemex respectively. This is just one way of comparing these companies. CRH, for example, might be keen to promote how its other metrics like cash generation and return on capital employed perform compare favourably to its competitors.
The point though is that it has taken Cemex over a decade since its acquisition of Rinker to rebuild its finances. All being well, it stands ready to take advantage of whatever the cement market holds in the 2020s.
Guillermo Rojo de Diego appointed general manager of Trinidad Cement
13 February 2019Trinidad: Trinidad Cement has appointed Guillermo Rojo de Diego as the general manager. He succeeds Rodolfo Martinez, who held the position from mid-2017. Martinez will take up another role with Cemex, the owner of Trinidad Cement.
Local government considers licence for cement terminal at Mallorca
11 February 2019Spain: The local council in Alcudia, Mallorca is considering a licence application for the construction of a 65,000t cement terminal at its port. The application follows the end of a public consultation period, according to the Majorca Daily Bulletin newspaper. The unit plans to have a capacity of at least 65,000t for the four years of its operation and then it will rise to 90,000t. It will use a pneumatic conveying system to minimise dust pollution emissions.
The Balearic Ports Authority previously gave its authorisation to the project in 2018 but it has faced opposition from environmental protestors. Cemex announced in late 2018 that it intended to stop production at its Lloseta cement plant on the island.
Cemex’s earnings lower outside of the Mexico and the US in 2018
07 February 2019Mexico: Cemex’s operating earnings before interest, taxation, depreciation and amortisation (EBTIDA) rose by 1% year-on-year on a like-for-like basis to US$2.56bn in 2018 from US$2.57bn in 2017. It has attributed this decrease in real terms to lower earnings from its territories outside of Mexico and the US. Its net sales rose by 5% to US$14.4bn from US$13.6bn.
“We are pleased with our 6% top-line growth during 2018, supported by higher consolidated volumes and prices in our three core products. Operating EBITDA grew by 1% on a like-to-like basis in this period,” said Fernando A Gonzalez, the chief executive officer (CEO) of Cemex. He added the company had reduced its total debt to nearly US$1bn in 2018.
By region, Cemex’s sales and earnings rose in Mexico and the US, fell in the rest of the Americas and were mixed in Europe. In the Asia, Middle East and Africa sales increased due to growth in the Philippines but earnings fell.
Cemex concrete plant in Panama receives certification from Concrete Sustainability Council
01 February 2019Panama: Cemex’s Panama Norte concrete plant has been awarded Responsible Sourcing Certification from the Concrete Sustainability Council (CSC). The building materials company says it is the first facility in the ready-mix concrete sector in Latin America to receive this designation. The plant met the CSC requirements via an audit by SGS, an independent certification body.
“We are proud of our Panama Norte plant for becoming the first concrete facility in Latin America to attain CSC certification, and we are committed to foster our leadership in the industry by delivering a superior customer experience and integrating sustainability into all aspects of our business,” said Andres Jimenez, President of Cemex Panama.
Launched in 2017 by 11 founding members - including the World Business Council for Sustainable Development, the Portland Cement Association and Cemex - the CSC aims to improve the transparency of the concrete sector and highlight the essential role of concrete in creating a sustainable construction sector by getting recognition in green procurement government policies and building rating systems. The CSC acts as a certification system, grading building materials facilities on environmental, social and governance practices throughout supply chains.
Philippines: Cemex Philippines has received a set of tax breaks and financial incentives for the new 1.5Mtyr production line it is planning to build at its Solid Cement plant in Antipolo, Rizal. Its subsidiary Solid Cement has obtained ‘pioneer’ status from the Board of Investment (BOI) but with ‘non-pioneer’ incentives, according to the Inquirer newspaper. This means that the project may be able to benefit from a longer income-tax holiday. The new production line is scheduled to be operational by early 2020.
José Antonio Cabrera appointed president of Cemex Dominicana
30 January 2019Dominican Republic: Cemex has appointed José Antonio Cabrera as the president of Cemex Dominicana. He succeeds Alejandro Ramírez, who has been named president of Cemex Colombia, according to the El Nuevo Dia newspaper. The business has operations in the Dominican Republic, Haiti and Puerto Rico.
Cabrera previously served as Vice President of Strategic Planning at Cemex Egypt, as well as Vice President of Strategic Planning for Cemex's Asia, Middle East and Africa (AMEA) region. He first joined Cemex in 2000 and has held positions including Commercial and Operations Director of Cemex Spain and Project Manager of Strategic Planning for Cemex Spain and the Mediterranean region.
Germany: HeidelbergCement has been awarded ‘A-‘ in the climate change category of CDP’s Climate A List. It also received the same score in the water security category. The result marked it as the highest-scoring cement company on the list beating other major international producers such as LafargeHolcim, Cemex and CRH. Notably, these other cement companies each received ‘F’ for water security due to a lack of sufficient information available. CDP analyses data from over 6800 large companies around the world.
“This is a strong confirmation that we are on the right track with our Sustainability Commitments 2030. The excellent result encourages us to further reduce our ecological footprint across all business lines and on a global level,” said Bernd Scheifele, chairman of the managing board of HeidelbergCement.
Cemex joins global youth business alliance
25 January 2019Mexico: Cemex is joining the Global Alliance for Youth (All4YOUth), a business alliance of more than 200 companies that seeks to strengthen the capabilities of young people between the ages of 18 and 29 years to enter the professional world. Founded by Nestlé in 2014, All4YOUth is a scheme intended to help young people around the world to acquire business skills. Its aim is to reduce school dropout rates, contribute to young people’s employability, and to help them develop their skills for the workplace of today and tomorrow.
Cemex says that its participation in the alliance will help more than 65,000 young people by 2022. Until now, the company’s social programs have already reached 34,000 youth through the New Employment Opportunities (NEO) alliance, with 60% formal job placement within six months.
Belaz supplies dump trucks to APO Cement
17 January 2019Philippines: Belorussian company Belaz has sold dump trucks to the Philippines for the first time. 7555 Series 55t trucks will be used to operate in the sand quarry of APO Cement, a subsidiary of Cemex. The trucks include extended bodies, multiple-disk oil cooled brakes and additional fuel filters.