About Us - Press Release - CEMEX reports second quarter 2009 results
July 28, 2009
CEMEX, S.A.B. de C.V. (NYSE: CX), announced today that consolidated net sales decreased to US$4.2 billion versus US$6.3 billion in the comparable period in 2008, representing a decrease of 34%, or a decrease of 20% when adjusting for the exclusion of our Venezuelan operations, the sale of our assets in the Canary Islands, and currency fluctuations. EBITDA decreased 41% in the second quarter of 2009 to US$812 million from US$1.4 billion in the same period of 2008, or 27% when adjusting for divestments and currency fluctuations.
CEMEX's Consolidated Second Quarter Financial and Operational Highlights
- Lower sales in the quarter were primarily attributable to lower volumes, mainly from our U.S. and Spanish operations, as well as the exclusion of our Venezuelan operations, and the sale of our assets in the Canary Islands, which were partially mitigated by price stability in most of our markets
- The infrastructure sector was the main driver of demand in most of the markets we serve despite the fact that we have not yet seen the positive impact of stimulus packages around the world
- Free cash flow after maintenance capital expenditures for the quarter was US$456 million, down 38% from US$739 million in the same quarter of 2008
- Operating income decreased 54% during the quarter compared with the same period last year, reaching US$411 million
Hector Medina, Executive Vice President of Finance and Legal, said, “During the second quarter of 2009, we continued to face a challenging business environment. In response to the difficult times we are facing, we are first and foremost committed to reducing our debt level through the realization of our global cost-reduction efforts and our rightsizing initiatives. CEMEX will continue to pursue its disciplined efforts to become a leaner and more agile organization, and to regain its financial flexibility in order to strategically position itself for future growth when the global economy stabilizes.”
Consolidated Corporate Results
Majority net income was a gain of US$187 million in the second quarter of 2009 versus a gain of US$444 million in the second quarter of 2008 due to lower operating income, which was partially mitigated by fewer losses on financial instruments.
Net debt at the end of the second quarter was US$18.3 billion, representing an increase of US$238 million during the quarter.
Geographical Markets Second Quarter Highlights
Net sales in our operations in Mexico decreased 21% in the second quarter of 2009 to US$853 million, compared with US$1.1 billion in the second quarter of 2008. EBITDA decreased 21% to US$326 million versus the same period of last year.
CEMEX’s operations in the United States reported net sales of US$746 million in the second quarter of 2009, down 43% from the same period in 2008. EBITDA decreased 70% to US$70 million, from US$233 million in the second quarter of 2008.
In Spain, net sales for the quarter were US$221 million, down 54% from the second quarter of 2008, while EBITDA decreased 61% to US$55 million.
Our operations in the United Kingdom experienced a 40% decline in net sales, to US$306 million, when compared with the same quarter of 2008. EBITDA decreased 35% to US$16 million in the second quarter.
Net sales in the Rest of Europe region decreased 30% during the second quarter of 2009 to US$938 million, versus the comparable period in the previous year. EBITDA was US$132 million for the region in the second quarter of 2009, down 36% from the same period in the previous year.
CEMEX’s operations in South/Central America and the Caribbean reported net sales of US$357 million during the second quarter of 2009, representing a decline of 41% over the same period of 2008. EBITDA decreased 40% for the quarter to US$124 million versus the same period in 2008.
Second-quarter net sales in Africa and the Middle East were US$267 million, down 7% from the same quarter of 2008. EBITDA increased 16% to US$90 million for the quarter versus the comparable period in 2008.
Operations in Asia and Australia reported a 30% decline in net sales, to US$431 million, versus the second quarter of 2008, and EBITDA was US$84 million, down 29% from the same period in the previous year.
CEMEX is a 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. No assurances can be given as to when or whether CEMEX will consummate a public offering of equity securities under the approvals granted by CEMEX shareholders or as to the terms of any such offering. Many factors could affect CEMEX’s decisions to proceed with any such offering. Many factors could also 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. 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.