UPDATE 3-Mexican cement maker Cemex's core profit up but below expectations

Fri Jul 18, 2014 10:23am EDT

(Rewrites first paragraph, adds share movements)

MEXICO CITY, July 18 (Reuters) - Mexico's Cemex, one of the world's largest cement companies, on Friday reported its first quarterly profit since the financial crisis in 2009, but its core profit missed analysts' expectations as domestic sales remained weak.

The company reported an unexpected profit of $76 million, mostly driven by a $77 million gain from a derivative position tied to the company's own share price. Cemex shares rose 9.5 percent in the second quarter.

But the company said its core profit, or earnings before interest, taxes, depreciation and amortization (EBITDA), was only $737 million, up from $730 million in the year-earlier period but below analysts' estimates of $768 million.

Cemex shares fell more than 2 percent on Mexico's stock exchange before paring losses. They were last trading up about 1 percent at 17 pesos.

Net sales totaled $4.2 billion, up 4 percent from the April-June period last year, helped by higher prices and a pick-up in sales volumes in the United States, Mediterranean, South and Central America and in the Caribbean and Asia.

U.S. sales rose 10 percent to $957 million, while sales in the Mediterranean were up 12 percent to $449 million from the year-earlier quarter.

But sales in Mexico, which account for more than one-third of Cemex's total revenue, fell 4 percent, reflecting the weak economic environment in Latin America's second-largest economy.

Cemex introduced a new executive team in May after the sudden death of its chief executive officer, Lorenzo Zambrano.

The cement maker, which took on billions in debt to fund an aggressive expansion on five continents under Zambrano, is still chafing under about $17 billion in debt. The new chairman, Rogelio Zambrano Lozano, a cousin of the late Cemex CEO, has said the company was aiming to regain its investment-grade rating.

Fernando Gonzalez, the new CEO, has also said Cemex's priority was to reduce leverage, although the company will still consider opportunities as the cement industry consolidates. (Reporting by Elinor Comlay; Editing by Franklin Paul, Jeffrey Benkoe and Paul Simao)

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