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UPDATE 4-Cemex posts better-than-expected profit amid storms, quakes
October 26, 2017 / 10:41 AM / 23 days ago

UPDATE 4-Cemex posts better-than-expected profit amid storms, quakes

(Recasts with storms, quakes, adds financial details, updates share price)

By Daina Beth Solomon and Gabriel Stargardter

MEXICO CITY, Oct 26 (Reuters) - Mexican cement producer Cemex shrugged off earthquakes and hurricanes in its top markets to post a better-than-expected quarterly profit on Thursday, helped by a lower tax burden and lower financial costs.

Cemex’s third-quarter profit rose to $289.2 million from $285.6 million in the same period a year earlier, it said, prompting shares to rise nearly 2 percent.

Sales rose to $3.55 billion from $3.47 billion a year earlier, the company said. Analysts surveyed by Reuters expected $3.48 billion in revenue and $181 million in net income.

Cemex, which has been divesting assets to help cut debt and regain its investment grade rating, said it generated some of its third-quarter profit from its $168 million sale of shares in Mexican cement maker Grupo Cementos de Chihuahua in September.

Cemex, which has operations in more than 50 countries, had to contend with natural disasters in key markets. Chief Executive Fernando Gonzalez told investors on a conference call that storms, heavy rains and quakes affected demand.

In Mexico, which suffered two major earthquakes last month, quarterly sales volumes dropped across Cemex’s main products, including a 10 percent fall in domestic gray cement. Still, Cemex said it had higher prices in the region.

Gonzalez said reconstruction efforts after the quakes will likely require 500,000 tonnes of cement over the next 12 to 18 months.

In the United States, where net sales were down 3 percent for the quarter, Cemex said in its report that cement volumes increased 2 percent “despite significant precipitation and two hurricanes - Harvey that impacted Houston, and Irma that impacted Florida, Georgia and Tennessee.”

Cemex executives said that operations stalled in those regions for about a week during hurricane season, but did not estimate how much cement would be needed for reconstruction efforts in hard-hit Texas and Florida.

In an online presentation on Thursday, Cemex revised its estimate of growth in 2017 cement sales to 0 percent from the 1 to 3 percent announced last quarter.

Cemex shares were up nearly 2 percent at 15.78 pesos on Thursday morning. ($1 = 19.0439 Mexican pesos) (Reporting by Daina Beth Solomon and Noe Torres; Editing by Frances Kerry and Matthew Lewis)

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