About Us - Press Release - CEMEX's second quarter 2008 net sales increase 29%; EBITDA up 21%
July 22, 2008
CEMEX, S.A.B. de C.V. (NYSE: CX), announced today that consolidated net sales increased 29% in the second quarter of 2008 to US$6.3 billion versus US$4.9 billion in the comparable period in 2007. EBITDA increased 21% in the second quarter of 2008 to US$1.4 billion from US$1.1 billion in the same period of 2007.
CEMEX's Consolidated Second Quarter Financial and Operational Highlights
- Higher sales were mainly a result of the integration of Rinker as well as better supply-demand dynamics in most of our markets.
- Free cash flow after maintenance capital expenditures for the quarter was US$739 million, up 31% from US$562 million in the same quarter of 2007.
- Operating income increased 12% during the quarter compared with the same period last year, reaching US$899 million.
Hector Medina, Executive Vice President of Planning and Finance, said, "Our consolidated results for the second quarter show the strength of our business model, characterized by our international presence and diverse asset portfolio. We achieved significant increases in net sales while further reducing our debt level, even in the face of the continued downturn in the United States' residential sector and the downturn in the Spanish economy. Looking ahead, we remain focused on strengthening our financial flexibility while continuing to drive solid returns for our shareholders."
Consolidated Corporate Results
Majority net income decreased 27% to US$444 million in second quarter 2008 from US$611 million in the same period a year ago.
Net debt at the end of the second quarter was US$17.6 billion, representing a reduction of $US1.2 billion during the quarter. The net-debt-to-EBITDA ratio reached 3.5 times for second quarter 2008 compared with 3.7 times in first quarter 2008. Interest coverage reached 4.4 times during the quarter, down from 8.9 times a year ago.
Major Markets Second Quarter Highlights
Net sales in our operations in Mexico increased 12% in the second quarter of 2008 to US$1.1 billion, compared with US$967 million in the second quarter of 2007. EBITDA increased 16% to US$413 million versus the same period of last year.
CEMEX's operations in the United States reported net sales of US$1.3 billion in the second quarter of 2008, up 38% from the same period in 2007. EBITDA decreased 4% to US$233 million, from US$242 million in the second quarter of 2007.
In Spain, net sales for the quarter were US$481 million, down 8% from the second quarter of 2007, while EBITDA decreased 10% to US$140 million.
Net sales in the Rest of Europe region increased 27% during the second quarter of 2008 versus the comparable period in the previous year, reaching $1.3 billion. EBITDA was $208 million for the region in the second quarter of 2008, up 29% from the same period in the previous year.
CEMEX's operations in South/Central America and the Caribbean reported net sales of US$607 million during the second quarter of 2008, representing an increase of 20% over the same period of 2007. EBITDA increased 19% for the quarter to US$205 million versus the same period in 2007.
Second-quarter net sales in Africa and the Middle East were US$286 million, up 60% from the same quarter of 2007. EBITDA increased 69% to US$78 million for the quarter versus the comparable period in 2007.
Operations in Asia and Australia reported a 468% increase in net sales, reaching US$614 million, versus the second quarter of 2007, and EBITDA was US$119 million, up 303% from the same period in the previous year. This increase was mainly due to the integration of Rinker?s Australian operations
CEMEX is a growing global building materials company that provides high-quality products and reliable service to customers and communities in more than 50 countries throughout the world. CEMEX has a rich history of improving the well-being of those it serves through its efforts to pursue innovative industry solutions and efficiency advancements and to promote a sustainable future. 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. CEMEX assumes no obligation to update or correct the information contained in this press release.
EBITDA is defined as operating income plus depreciation and amortization. Free Cash Flow is defined as EBITDA minus net interest expense, maintenance and expansion capital expenditures, change in working capital, taxes paid, and other cash items (net other expenses less proceeds from the disposal of obsolete and/or substantially depleted operating fixed assets that are no longer in operation). Net debt is defined as total debt minus the fair value of cross-currency swaps associated with debt minus cash and cash equivalents. The net debt to EBITDA ratio is calculated by dividing net debt at the end of the quarter by EBITDA for the last twelve months. All of the above items are presented under generally accepted accounting principles in Mexico. EBITDA and Free Cash Flow (as defined above) are presented herein because CEMEX believes that they are widely accepted as financial indicators of CEMEX's ability to internally fund capital expenditures and service or incur debt. EBITDA and Free Cash Flow should not be considered as indicators of CEMEX's financial performance, as alternatives to cash flow, as measures of liquidity or as being comparable to other similarly titled measures of other companies.