Net Sales Increased 6% and Operating Cash Flow Increased 11% in Dollar Terms During the Third Quarter of 1998
October 26, 1998
CEMEX S.A. de C.V. (OTC:CMXBY) today announced that its net sales increased 6% in dollar terms during the third quarter of 1998 to US$1.059 billion from US$1.003 billion in the same period a year ago. The increase was attributable to strong pricing and higher domestic demand in many of the Company´s markets. In real peso terms, net sales increased 8% to Ps. 10.790 billion.
Operating cash flow grew 11% to US$355 million during the third quarter as compared to US$320 million a year ago. In real terms, operating cash flow grew 13% during the third quarter to Ps. 3.613 billion. In the third quarter, Mexico represented 57% of the total operating cash flow, Spain 20%, Venezuela 13%, Colombia 1%, the United States 6% and Central America and the Caribbean 3%.
Operating income increased 20% to US$288 million (Ps. 2.933 billion) in the third quarter 1998. Operating margin was 27.2% during the third quarter, versus 23.9% for the year ago period.
Cash earnings (operating cash flow less net interest expense) in the third quarter grew 23% in dollar terms versus the prior year to US$250 million (US$0.41 per ADR), or 25% in real terms to Ps. 2.546 billion (Ps. 4.14 per ADR).
Net income during the third quarter of 1998 was US$91 million (including monetary position gains of US$111 million) or Ps. 923 million in real terms. Net income during the same period in 1997 was US$245 million (including monetary position gains of US$134 million) or Ps. 2.442 billion. Net income per ADR in the third quarter was US$0.15 (Ps. 1.50), versus US$0.40 (Ps. 3.96) during the third quarter of 1997.
Interest expense for the third quarter of 1998 was US$113 million, a 10% decrease versus the same period a year ago.
Interest plus Preferred dividend coverage (operating cash flow before operating lease payments and cost restatements for inflation divided by interest expense plus dividend on Preferred Capital Securities) was 3.05 times in the third quarter and 2.85 times for the trailing twelve months. Interest plus tax coverage (operating cash flow before operating lease payments and cost restatements for inflation divided by interest expense plus Preferred dividend plus cash taxes paid) was 2.52 times on a trailing twelve months basis during the third quarter of 1998.
Net debt (on- plus off-balance sheet debt plus Preferred Capital Securities minus cash and cash equivalents) was US$4.642 billion at the end of the third quarter of 1998, US$42 million less than at the end of the second quarter 1998.
Leverage as defined by Net debt to Trailing Twelve Month operating cash flow declined to 3.45 times versus 4.17 times in the third quarter of 1997.
Rodrigo Treviño, Chief Financial Officer of CEMEX, stated, "With three quarters of strong results behind us, we are on track to achieve record performance in terms of operating cash flow and cash earnings for 1998. We have taken steps to prepare the Company to succeed under changing market conditions and this quarter results are further evidence that these efforts are paying off."
Founded in 1906, CEMEX is the largest cement producer in the Americas and one of the three most important producers of cement in the world, with a production capacity of approximately 52 million metric tons per year. CEMEX is the market leader in its operations in Mexico, Spain, Venezuela, Panama, and the Dominican Republic, and has a significant presence in the markets of Colombia, the Caribbean, the southwest region of the United States, and the Philippines.