April 26 Mexico's Cemex, one of the world's
biggest cement companies, reported a wider first-quarter loss on
Friday, hurt by a drop in cement sales that offset cost-cutting.
Cemex said weak sales, coupled with a stronger peso, set
back turnaround efforts after a battering from costly
acquisitions and the U.S. housing crisis.
Still, the company's shares rose as much
as 2 percent after initially falling, when executives on a
conference call reassured analysts they are raising cement
prices in many markets and that they are upbeat on
infrastructure and housing projects in Mexico.
The Monterrey-based company said the loss grew to $281
million from $30 million a year earlier, and was wider than
analysts' expectations of a $178 million loss, according to a
Core profit, or earnings before interest, taxes,
depreciation and amortization, fell 8 percent to $521 million,
and was below expectations for $537 million.
Revenue fell 5 percent from the year-earlier period, also
missing expectations, on weak sales in northern Europe and the
Mediterranean as well as South America, Central America and the
Cemex got a boost from a derivative position tied to its
share price that had a fair market value of $375 million in the
first quarter this year, compared with a negative value in the
same period last year.
Cemex shares rose more than 18 percent in the first quarter.
The shares were up 1.5 percent at 14.00 pesos in morning
The company expects a U.S. housing recovery that began at
the end of last year to help sales in 2013, executives said.
Fernando Gonzalez, vice president for finance and
administration, told analysts on a call that the company
increased prices in some parts of the country in April.
Cemex expects its cement sales to increase by 1 percent
globally in terms of volume this year, helped by growth in the
United States, Gonzalez said.
DECREASE IN SALES COSTS
Cemex benefited from a slight decrease in sales costs as it
trimmed expenses in the first quarter, excluding a pension fund
The cement maker has been digging out of deep debt
obligations for the past few years after paying $16 billion to
buy Australian peer Rinker just before the 2008 U.S. housing
The company wrapped up a refinancing package in the fall
that gave it much-needed room to push back looming debt payments
for up to four years.
Cemex has sold off non-core assets to pay off debt. It
raised about $1.1 billion in November by selling a
bigger-than-expected stake in its Latam unit in an initial
public offering in Colombia.
The company remains under pressure, reporting negative free
cash flow of $510 million in the quarter, compared with negative
$302 million a year earlier.