© Stocksak. FILEPHOTO: This is the logo of Mexican cementmaker CEMEX. It’s pictured at its Monterrey plant, Mexico, June 8, 2021. Picture taken June 8, 2021. REUTERS/Daniel Becerril
By Kylie Madry & Noe Torres
MEXICO CITY (Stocksak). -Mexican cement producer Cemex reported a profit for the third Quarter Thursday, despite higher prices. However, shares fell after it missed core earnings estimates.
Cemex reported net profits of $494 millions, reversing the surprise loss it suffered last year from high energy and transport prices.
Revenue reached $3.96 Billion, an increase of 7% over the previous year. This was due to increased sales in the United States, Mexico, and slightly lower sales elsewhere. Analysts at Banorte reported that revenue was in line with expectations.
The company stated that price was the main driver of cement, ready mix and aggregates.
Core earnings fell 10% to $649million in earnings before interest, tax and depreciation.
Mexican brokerage Actinver noted the decline in EBITDA in a recent report. It was much lower than the consensus estimate of $724 millions.
Cemex also decreased its EBITDA forecast to $2.7 billion for the year, which is around a 5 percent drop from last years $2.86 billion and was previously based on a prediction of “low-to–mid single-digit growth.”
Midmorning trading saw shares in Cemex fall by around 7%
Fernando Gonzalez, Cemex’s Chief Executive Officer, stated that although price increases have allowed the company to “more then offset” rising costs in a statement, inflation and supply chain disruptions “have delayed our ability regain margins.”
Cemex also reported that energy prices per tonne of cement were on the rise. This led to Cemex increasing its estimate for the year by around 40%.
Cemex has already announced price hikes through the end-of-the year and January, Lucy Rodriguez, Chief Communications Officer, stated in a conference call with analysts.
Gonzalez described the strategy as “challenging, but doable”, given that increased costs continued to eat into the company’s margins.
According to a presentation, the company also increased its fixed-asset investment to $1.35 Billion from $1.3 Billion.
Analysts at Banorte said that they would revise their expectations of Cemex after the report: “Although Cemex’s fundamentals remain solid in the long-term, we believe shares could be under pressure in the short-term.”