About Us - Press Release - CEMEX's second quarter 2007 net sales increase 6%
July 19, 2007
CEMEX, S.A.B. de C.V. (NYSE: CX), announced today that consolidated net sales increased 6% in the second quarter of 2007 to US$4.9 billion versus US$4.6 billion in the comparable period of 2006. EBITDA decreased 1% in the second quarter of 2007 to US$1.1 billion versus the same period of 2006.
CEMEX's Consolidated Second-Quarter Financial and Operational Highlights
- Higher cement and aggregates volumes and better supply-demand dynamics in most of our markets contributed to higher sales.
- Operating income in the second quarter decreased 6% to US$806 million when compared with the same period of 2006.
- Consolidated cement volume increased 1%, ready-mix volume decreased 4%, and aggregates volume increased 1%.
Hector Medina, Executive Vice President of Planning and Finance, said, "Our consolidated results show the continued strength of our business in the second quarter. We achieved significant increases in net sales while further reducing our debt levels, even in the face of the continued downturn in the United States' residential sector. Looking ahead, we remain focused on successfully completing the integration of Rinker in a timely manner while continuing to drive solid returns for our shareholders."
Consolidated Corporate Results
In the second quarter of 2007, majority net income increased 6% to US$611 million from US$579 million in the second quarter of 2006.
Net debt at the end of the second quarter was US$4.1 billion, representing reductions of $US1.1 billion during the quarter and US$4.1 billion since the end of the second quarter of 2006. The net-debt-to-EBITDA ratio decreased to 1.0 times from 1.2 times at the end of the first quarter of 2007. Interest coverage reached 8.9 times during the quarter, up from 7.7 times a year ago.
Second-Quarter Highlights for CEMEX's markets
Net sales in our operations in Mexico increased 10% in the second quarter of 2007 to US$967 million, compared with US$883 million in the second quarter of 2006. EBITDA increased 2% to US$357 million in the second quarter of 2007 versus the same period of last year. Cement, ready-mix, and aggregates volumes increased 3%, 8%, and 78%, respectively, during the quarter compared with the second quarter of 2006.
CEMEX's operations in the United States reported net sales of US$941 million in the second quarter of 2007, down 16% from the same period in 2006. EBITDA decreased 31% to US$242 million from US$349 million in the second quarter of 2006. Cement, ready-mix, and aggregates volumes decreased 11%, 21%, and 16%, respectively, during the quarter versus the second quarter of 2006.
In Spain, net sales for the quarter were US$520 million, up 9% from the second quarter of 2006, while EBITDA increased 2% to US$157 million. Cement, ready-mix, and aggregates volumes decreased 6%, 7%, and 4%, respectively, during the quarter versus the same period of the previous year.
Our operations in the United Kingdom experienced a 12% increase in net sales during the second quarter of 2007, to US$536 million, when compared with the same quarter of 2006. EBITDA decreased 9% to US$37 million in the second quarter from US$41 million in the comparable period of 2006.
Net sales in the Rest of Europe region increased 10% during the second quarter of 2007 versus the comparable period of the previous year, reaching US$1.1 billion. EBITDA was US$161 million for the region in the second quarter of 2007.
CEMEX's operations in South/Central America and the Caribbean reported net sales of US$504 million during the second quarter of 2007, representing an increase of 36% over the same period of 2006. EBITDA increased 64% for the quarter to US$172 million versus the same period of 2006.
Second-quarter net sales in Africa and the Middle East were US$179 million, up 2% from the same quarter of 2006. EBITDA increased 2% to US$46 million for the quarter versus the comparable period of 2006.
Operations in Asia reported a 23% increase in net sales during the second quarter of 2007, to US$108 million, versus the second quarter of 2006, and EBITDA was US$29 million, up 28% from the same period of 2006.
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. 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.
This press release contains forward-looking statements and information that are necessarily subject to risks, uncertainties, and assumptions. Many factors could cause the actual results, performance, or achievements of CEMEX to be materially different from those expressed or implied in this release, including, among others, changes in general economic, political, governmental, and business conditions globally and in the countries in which CEMEX does business, changes in interest rates, changes in inflation rates, changes in exchange rates, the level of construction generally, changes in cement demand and prices, changes in raw material and energy prices, changes in business strategy, and various other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. CEMEX assumes no obligation to update or correct the information contained in this press release.
EBITDA is defined as operating income plus depreciation and amortization. Free Cash Flow is defined as EBITDA minus net interest expense, maintenance and expansion capital expenditures, change in working capital, taxes paid, and other cash items (net other expenses less proceeds from the disposal of obsolete and/or substantially depleted operating fixed assets that are no longer in operation). Net debt is defined as total debt minus the fair value of cross-currency swaps associated with debt minus cash and cash equivalents. The net debt to EBITDA ratio is calculated by dividing net debt at the end of the quarter by EBITDA for the last twelve months. All of the above items are presented under generally accepted accounting principles in Mexico. EBITDA and Free Cash Flow (as defined above) are presented herein because CEMEX believes that they are widely accepted as financial indicators of CEMEX's ability to internally fund capital expenditures and service or incur debt. EBITDA and Free Cash Flow should not be considered as indicators of CEMEX's financial performance, as alternatives to cash flow, as measures of liquidity or as being comparable to other similarly titled measures of other companies.