Cemex Reports Tenfold Increase in Net Income
Thursday, February 09, 2017 6:15:00 AM ET
--Operating EBITDA increased on a like-to-like basis by 15% during the full year versus 2015, while EBITDA margin increased 1.7 percentage points in the same period. EBITDA and EBITDA margin were the highest achieved since 2008 and 2007, respectively.
--Free cash flow after maintenance capex for the full year was US$1.7 billion, almost double last years level, and the highest since 2008.
Cemex, S.A.B. de C.V. ("CEMEX") (CX ), announced today that, on a
like-to-like basis for the ongoing operations and adjusting for currency
fluctuations, consolidated net sales increased by 4% during the fourth
quarter of 2016 to US$3.2 billion, and increased 4% for the full year
2016 to US$13.4 billion versus the comparable periods in 2015. Operating
EBITDA on a like-to-like basis increased by 10% during the fourth
quarter of 2016 to US$654 million and increased by 15% for the full year
to US$2.7 billion versus 2015.
CEMEXs Consolidated Fourth-Quarter and Full-Year
2016 Financial and Operational Highlights
The increase in quarterly consolidated net sales on a like-to-like
basis was due to higher prices of our products, in local currency
terms, in most of our operations, as well as higher volumes in Mexico,
the United Kingdom and Germany.
Operating earnings before other expenses, net, in the fourth quarter
increased by 12%, to US$453 million and increased 14%, to US$1.9
billion, for the full-year 2016.
Controlling interest net income during the quarter was almost 50%
higher, reaching US$214 million from an income of US$144 million in
the same period last year. Also, controlling interest net income for
the full year improved to US$750 million from an income of US$75
million in 2015.
Operating EBITDA on a like-to-like basis increased by 10% and 15%
during the quarter and the full year, respectively, to US$654 million
and US$2.7 billion versus the comparable periods of 2015.
Operating EBITDA margin during the quarter grew by 1.0 percentage
points on a year-over-year basis reaching 20.5%. For the full year,
operating EBITDA margin increased to 20.5%, up 1.7 percentage points
Free cash flow after maintenance capital expenditures for the quarter
increased by 9% to US$617 million, compared to the same quarter of
2015. For the full year 2016, free cash flow after maintenance capital
expenditures reached US$1.7 billion, an increase of 91% versus
Asset sales reached approximately US$2 billion, of which slightly
above US$1 billion closed during 2016. These assets are being sold at
double-digit multiples on average.
Fernando A. Gonzalez, Chief Executive Officer, said, "2016 was a very
good year for CEMEX. Despite continued volatility and uncertainty in the
markets, we were able to deliver strong underlying operational and
financial results by remaining focused on the variables that we control.
"As a result of our favorable volume and price performance, sales
increased by 4% in 2016, while operating EBITDA grew by 15%, on a
like-to-like basis. Our free cash flow after maintenance capex was close
to US$1.7 billion, almost double last years level. This was driven by
higher EBITDA generation as well as our initiatives to reduce interest
expense, maintenance CAPEX and working capital investment.
"In line with our stated objective to reach an investment grade capital
structure as soon as possible, we applied the proceeds from our free
cash flow generation and asset sales mainly for debt reduction. Our
total debt is close to US$2.3 billion lower than that at the end of
2015. This represents a 15% reduction from the debt level as of the end
of 2015 and a 25% reduction since the end of 2013.
"We are also pleased that S&P Global Ratings recognized our discipline
and consistency in reducing our leverage with in an improvement in our
credit rating, which should further enhance our financial flexibility
and reduce our cost of capital."
Consolidated Corporate Results
During the fourth quarter of 2016, controlling interest net income was
US$214 million, an improvement over a gain of US$144 million in the same
period last year.
Total debt plus perpetual notes decreased by US$892 million during the
quarter. During 2016, total debt plus perpetual notes was reduced by
approximately US$2.3 billion, which represents a 15% reduction from the
debt level as of the end of 2015 and a 25% reduction compared to the end
Geographical Markets Fourth-Quarter 2016 Highlights
Net sales in our operations in Mexico increased 25% on a
like-to-like basis in the fourth quarter of 2016 to US$701 million,
compared with US$672 million in the fourth quarter of 2015. Operating
EBITDA increased by 28% on a like-to-like basis to US$245 million versus
the same period of last year.
CEMEXs operations in the United States reported net sales of
US$880 million in the fourth quarter of 2016, flat on a like-to-like
basis from the same period in 2015. Operating EBITDA increased by 16% on
a like-to-like basis to US$183 million in the quarter, versus a gain of
US$162 million in the same quarter of 2015.
CEMEXs operations in South, Central America and the Caribbean
reported net sales of US$403 million during the fourth quarter of 2016,
representing a decrease of 6% on a like-to-like basis over the same
period of 2015. Operating EBITDA decreased 12% on a like-to-like basis
to US$108 million in the fourth quarter of 2016, from US$125 million in
the fourth quarter of 2015.
In Europe, net sales for the fourth quarter of 2016 decreased 2%
on a like-to-like basis to US$759 million, compared with US$834 million
in the fourth quarter of 2015. Operating EBITDA was US$76 million for
the quarter, 3% lower on a like-to-like basis than the same period last
Operations in Africa, Middle East and Asia reported a 9% decrease
in net sales on a like-to-like basis for the fourth quarter of 2016, to
US$328 million, versus the fourth quarter of 2015. Operating EBITDA for
the quarter was US$76 million, up 5% on a like-to-like basis from the
same period last year.
CEMEX is a global building materials 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.
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.
Operating EBITDA is defined as operating income plus depreciation and
operating amortization. Free Cash Flow is defined as Operating 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 Consolidated Funded Debt to Operating EBITDA ratio is
calculated by dividing Consolidated Funded Debt at the end of the
quarter by Operating EBITDA for the last twelve months. All of the above
items are presented under the guidance of International Financial
Reporting Standards as issued by the International Accounting Standards
Board. Operating EBITDA and Free Cash Flow (as defined above) are
presented herein because CEMEX believes that they are widely accepted as
financial indicators of CEMEXs ability to internally fund capital
expenditures and service or incur debt. Operating EBITDA and Free Cash
Flow should not be considered as indicators of CEMEXs financial
performance, as alternatives to cash flow, as measures of liquidity or
as being comparable to other similarly titled measures of other
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SOURCE: Cemex, S.A.B. de C.V.">
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Cemex, S.A.B. de C.V.
Jorge Perez, +52(81) 8888-4334
Eduardo Rendon, +52(81) 8888-4256
Lucy Rodriguez, +1 212-317-6007