Cemex sees cement demand rising as U.S. market rebounds
MEXICO CITY |
MEXICO CITY (Reuters) - Mexico's top cement maker Cemex sees stronger results for its U.S. operations between 2013 and 2016, suggesting recovery at one of its top markets is underway following nearly four years of struggle.
Karl Watson, president of Cemex USA operations, told analysts during a presentation on Tuesday the company expected U.S. housing starts to increase by 16 percent next year, reaching 873,000.
The company forecast U.S. residential sector cement demand will increase by 14 percent in 2013.
One of the world's biggest cement companies, Cemex was hard-hit by the collapse of the U.S. housing market soon after paying about $16 billion to buy Australian peer Rinker.
The company recently finished refinancing a huge portion of its debt, gaining much-needed breathing room to get back on its feet.
Watson said U.S. annual cement sales are now at about $3 billion, adding that by 2016 it may generate U.S. earnings before interest, taxes, depreciation and amortization of about $1 billion.
Analysts at the San Antonio, Texas, meeting voiced concern over the United States facing the so-called fiscal cliff, a combination of U.S. government spending cuts and tax increases due to take effect in early 2013 that might tip the economy back into recession.
"We are heading up. People are investing, signing contracts, there's real momentum ... We don't see our business falling off a cliff," Watson said.
Cemex traded 0.42 percent lower at 11.75 pesos, while its New York-traded shares eased 0.77 percent to $9.
(Reporting by Cyntia Barrera Diaz and Gabriela Lopez; Editing by Jeffrey Benkoe)
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