67% growth in cash earnings in first quarter of 1998
April 20, 1998
CEMEX S.A. de C.V. (OTC:CMXBY) announced today its cash earnings (operating cash flow less net financial expenses) for the first quarter of 1998 increased 67% in real peso terms versus last year to Ps. 2.001 billion (Ps. 3.29 per ADR). In dollar terms, cash earnings increased 72% to US$234 million (US$0.39 per ADR).
Consolidated cement volumes grew by 13% versus the first quarter of 1997 and, combined with higher prices in most subsidiaries, led to a 22% increase in consolidated net sales to Ps. 8.489 billion. In dollar terms, net sales grew at a faster pace, increasing 26% to US$993 million.
Operating income increased 44% to Ps. 2.300 billion for the quarter and 48% in dollar terms to US$269 million, attributable to sales growth and cost declines. The operating margin reached 27.1% in the first quarter 1998 from 23.0% last year.
Improvements in all major operations produced a 34% increase in operating cash flow (EBITD before lease payments and cost restatements) in the quarter to Ps. 2.985 billion. In dollar terms, cash flow reached US$349 million, a 38% growth over the US$254 million reported during the first quarter of 1997. Cash flow margin was 35.1% in the quarter versus 32.1% last year.
Net income during the first quarter of 1998 was Ps. 1.553 billion (US$182 million) including monetary position gains of Ps. 1.411 billion. Net income per ADR in the first quarter was Ps. 2.55 (US$0.30), versus Ps. 2.39 (US$0.27) during the same period a year ago. Excluding shares held in trust for equity swaps, the average number of ordinary shares outstanding during the quarter totaled 1.218 billion.
Financial expenses were Ps. 1.051 billion, or US$123 million in dollar terms, representing an additional reduction of 5% in real peso terms versus the same period in 1997. On a trailing twelve month basis, interest coverage improved to 2.62 times from 1.73 times during the first quarter of 1997.
Net debt (on- plus off-balance sheet debt minus cash and cash equivalents) was reduced by US$300 million compared with the first quarter of 1997, to US$4,657 million. Between the fourth quarter 1997 and first quarter 1998, net debt fell by US$81 million or 2% in dollar terms.
Leverage (net debt to operating cash flow for the previous twelve months) was reduced from 4.55 at the end of the first quarter of 1997 to 3.55 in the same period of 1998.
Rodrigo Treviño, Chief Financial Officer, commented, "We are pleased with the fast pace of cash earnings growth during the first quarter. The high growth profile of our geographically diversified business portfolio together with lower net debt levels, should allow us to continue to expand cash earnings at a strong pace."
Founded in 1906, CEMEX is the largest cement company in the Americas and one of the three largest cement companies of the world, with close to 51 millions metric tons of production capacity. CEMEX has market-leading operations in Mexico, Spain, Venezuela, Panama and the Dominican Republic, and a significant presence in Colombia, the Caribbean and the southwest United States.