About Us - Press Release - CEMEX's net sales and cash earnings grow 11% in dollar terms for fourth quarter 2001
January 28, 2002
CEMEX, S.A. de C.V. (NYSE: CX) reported today that its net sales for the fourth quarter of 2001 were US$1.7 billion, an 11% growth in dollar terms versus fourth quarter 2000. In real peso terms, net sales increased 7%, to Ps 15.4 billion.
Net sales increased due to higher revenues in the U.S., and the company's operations in the Caribbean region.
EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter totaled US$520 million, a 1% increase in dollar terms compared to the same period in 2000. In real peso terms, EBITDA was 3% lower for the quarter, at Ps 4.8 billion.
Cash earnings, as defined by EBITDA minus net financial expense, rose 11% compared to fourth quarter 2000, reaching US$446 million (US$1.53 per ADS). In real peso terms, cash earnings were 7% higher than the same period a year ago, reaching Ps 4.1 billion (Ps 2.80 per CPO).
Héctor Medina, Executive Vice-President of Planning and Finance, said: "We delivered on our commitment to produce bottom-line results. In 2001, we achieved double-digit growth in our consolidated net sales and EBITDA, and we met our original target for free cash flow generation of US$1 billion. 2002 offers us the opportunity to continue to deliver shareholder value through free cash flow growth, an even stronger capital structure, and a lower cost of capital."
For the year ended December 31, 2001, net sales reached US$6.9 billion, up 23% in dollar terms versus 2000, while EBITDA, at US$2.2 billion, rose 11% year over year. In real peso terms, net sales for the full year increased 19% versus 2000, to Ps 63.5 billion, and EBITDA was 7% higher, reaching Ps 20.7 billion. Cash earnings for the full year grew 19% in dollar terms, to US$1.9 billion, and in real peso terms, rose by 14% to Ps 17.3 billion.
CEMEX's consolidated free cash flow for the quarter was US$212 million, down 1% versus the same period a year ago. For the full year, free cash flow was US$1.1 billion, a 29% gain compared to the previous year.
Fourth quarter operating income declined 6% in dollar terms to US$371.7 million; in real peso terms, operating income was 10% lower at Ps 3.4 billion. For the full year, operating income was flat in dollar terms at US$1.6 billion, while in real peso terms it was 4% lower, reaching Ps 15.2 billion.
CEMEX's majority net income during the quarter rose 51% in dollar terms to US$372.3 million (US$1.28 per ADS) and, in real peso terms, grew 45% to Ps 3.4 billion (Ps 2.34 per CPO). Majority net income for 2001 was US$1.2 billion (US$4.11 per ADS), up 18% versus 2000, while in real peso terms it grew 13% to Ps 10.8 billion (Ps 7.55 per CPO).
Interest plus preferred dividend coverage (EBITDA before operating lease payments and cost restatements for inflation divided by interest expense plus dividend on Preferred Capital Securities and Preferred Equity) was 4.42 times for the trailing twelve months versus 4.07 times a year ago. Leverage, defined as Net Debt to Trailing Twelve Month EBITDA, declined to 2.7 times versus 3.0 times at the end of 2000.
Net debt at the end of the quarter was US$6.1 billion, decreasing US$1 billion during 2001, and US$163 million during the fourth quarter. Total debt refinancing for the year 2001 was US$2.6 billion.
On a worldwide basis, CEMEX's consolidated cement sales volume for the quarter was 14.8 million metric tons, 7% higher versus the same quarter in 2000, while ready-mix volumes, at 4.4 million cubic meters, grew 6%. For the full year, cement volumes increased 18% compared to 2000, reaching 61.2 million metric tons, while ready-mix volumes grew 15% to 18.2 million cubic meters.
Fourth quarter 2001 operational highlights in North America include flat net sales in dollar terms for the company's Mexican operations, despite a 5% reduction in cement sales volumes vis-à-vis fourth quarter 2000.
In the U.S., net sales grew 40% compared to fourth quarter 2000, and cement sales volumes rose 60%, due to the consolidation of Southdown. The increase in cement sales resulted from more favorable weather conditions, higher industry sales, and strong demand conditions in the South Central Region.
During the fourth quarter, CEMEX completed the expansion of its Victorville cement plant in California, adding one million metric tons of new capacity, which will reach full utilization during first quarter 2002. The new capacity will satisfy domestic demand of CEMEX customers in the U.S., and will reduce CEMEX imports into California and Arizona.
In Europe, quarterly cement and ready-mix volumes in Spain grew 1% and 6%, respectively, compared to fourth quarter 2000. The public works sector continues to be strong and is expected to be the main driver of cement consumption in Spain in the coming months, even though cement demand both housing and non-residential sector continue to decelerate.
In South America, CEMEX's Venezuelan operations reported a 4% increase in domestic cement volumes compared to fourth quarter 2000, driven mainly by the self-construction sector and by government spending on infrastructure and public housing projects. In Colombia, quarterly cement volumes were 11% lower versus the same year-ago period, but its EBITDA generation grew 9% in dollar terms during the quarter due to higher cement prices measured in dollars.
CEMEX's operations in Central America and the Caribbean had a 32% increase in net sales compared to the last quarter of 2000, while its EBITDA was 22% higher quarter over quarter.
The company's unit in the Philippines reported domestic cement sales volumes 11% higher than fourth quarter 2000. The construction sector in the Philippines continues to perform weak, as infrastructure development is almost non-existent and cement demand in the residential sector is poor.
In Egypt, CEMEX's operations had a 15% growth in domestic cement volumes versus fourth quarter 2000. The increased volume was driven by sales in the lower region of Egypt and by successful marketing programs in the company's most dynamic markets. Public spending remains stable, while the private sector remains depressed.
CEMEX is a leading global producer and marketer of cement and ready-mix products, with operations primarily concentrated in the world's most dynamic cement markets across five continents. CEMEX combines a deep knowledge of the local markets with its global network and information technology systems to provide world-class products and services to its customers, from individual homebuilders to large industrial contractors. For more information, visit www.cemex.com.
This press release contains forward-looking statements and information that are necessarily subject to risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements of CEMEX to be materially different from those expressed or implied in this release, including, among others, changes in general economic, political, governmental and business conditions globally and in the countries in which CEMEX does business, changes in interest rates, changes in inflation rates, changes in exchange rates, the level of construction generally, changes in cement demand and prices, changes in raw material and energy prices, changes in business strategy and various other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein.
EBITDA is defined as earnings before interest, tax, depreciation and amortization. Free cash flow is defined as EBITDA minus net interest expense, capital expenditures, increase or decrease in working capital, cash taxes, preferred equity dividend payments, employee profit-sharing payments paid in cash, US dumping charges paid in cash and other cash items. Net debt is defined as total on balance sheet debt plus preferred equity and capital securities minus cash and cash equivalents. All of these items are presented under Mexican generally accepted accounting principles.