About Us - Press Release - CEMEX's second quarter 2006 EBITDA up 16%; sales increase 5%
July 25, 2006
CEMEX, S.A.B. de C.V. (NYSE: CX) announced today that EBITDA increased 16% in the second quarter of 2006 to US$1.14 billion. Consolidated net sales in the second quarter of 2006 grew 5% to US$4.6 billion.
CEMEX Consolidated Second-Quarter Financial and Operational Highlights
- EBITDA (operating income plus depreciation and amortization) increased to US$1.14 billion, an increase of 16% over US$989 million achieved in the second quarter of 2005.
- Free cash flow after maintenance capital expenditures was US$779 million, an increase of 5% over the second quarter of last year.
- Increased sales in the majority of CEMEX's markets were the result of to higher demand for cement, ready-mix, and aggregates. Public infrastructure and housing continue to be the main drivers of cement and ready-mix demand in the majority of CEMEX's markets.
- Operating income for the second quarter increased 15% to US$861 million over US$751 million in the comparable period in 2005.
- CEMEX's consolidated cement volume increased 3% to 22.4 million metric tons, while consolidated ready-mix and aggregates volumes fell 6% and 9% respectively.
Hector Medina, Executive Vice President of Planning and Finance, said: "We continue to be encouraged by our post-consolidation performance. Our solid performance during the first half of the year resulted primarily from the strength of our operations in most of our core markets, as well as from the realization of the RMC synergies that further enhanced this growth. As we look forward to the second half of the year, we remain optimistic about our ability to continue to drive solid returns for our shareholders."
Consolidated Corporate Results
During the second quarter of 2006, majority net income decreased 21% to US$579 million. The decrease in majority net income for the quarter comes mainly from non-cash intercompany foreign-exchange and financial-instrument losses.
Net debt at the end of the second quarter of 2006 was US$8.1 billion, representing reductions of US$343 million during the quarter, and US$2.3 billion since the end of the first quarter of 2005. The net-debt-to-EBITDA ratio decreased to 2.1 times from 2.3 times at the end of the first quarter of 2006. Interest coverage reached 7.7 times during the quarter, up from 6.5 times a year ago.
Major Markets Second-Quarter Highlights
CEMEX's Mexican operations had net sales of $883 million, up 11% in the quarter versus the second quarter of 2005, while EBITDA increased 6% to US$350 million. Mexican cement and ready-mix volumes increased 6% and 20% respectively during the quarter.
Net sales in the United States decreased 3% to US$1.12 billion in the second quarter of 2006. EBITDA grew 23% over the prior year period to US$349 million. On a like-to-like basis for ongoing operations, cement, ready-mix and aggregates volumes decreased 3%, 16% and 21%, respectively during the quarter compared with second quarter 2005. For the first six months of the year and on a like-to-like basis, cement volumes increased 6%, ready-mix volumes decreased 8%, and aggregates volumes decreased 11% versus the first six months of 2005.
CEMEX's Spanish operations reported net sales of US$476 million in the second quarter of 2006, up 10% versus the second quarter of 2005. EBITDA increased 26% to US$154 million in the quarter. Domestic cement volume increased 6% during the second quarter of 2006 over the same period in 2005. Ready-mix volumes, when adjusted for the integration of the Readymix Asland assets after the termination of the joint venture with Lafarge, increased 6%.
The Company's operations in the United Kingdom experienced a decrease in net sales and EBITDA of 5% to US$478 million, and 29% to US$41 million, respectively.
Rest of Europe
During the second quarter of 2006, net sales in the other European markets were US$953 million, up 8%. EBITDA increased 7% to US$147 million.
South/Central America and the Caribbean
CEMEX's operations in South/Central America and the Caribbean reported net sales of US$371 million during the second quarter of 2006, an increase of 10% over the second quarter of 2005. EBITDA increased 19% to US$105 million versus the prior year period.
Africa and the Middle East
Second quarter net sales in Africa and the Middle East were US$176 million, up 23% as compared to the same quarter of 2005. EBITDA increased 38% to US$45 million.
CEMEX's Asia-based operations experienced an increase in net sales of US$88 million, an increase of 16% over the second quarter of 2005. EBITDA increased 64% to US$23 million for the region, over the prior year period.
CEMEX is a growing global building solutions company that provides high quality products and reliable service to customers and communities in more than 50 countries throughout the world. Commemorating its 100th anniversary in 2006, CEMEX has a rich history of improving the well-being of those it serves through its efforts to pursue innovative industry solutions and efficiency advancements and to promote a sustainable future. For more information, visit www.cemex.com.