Cemex reports near tenfold year-on-year increase in net income in Q1 2017

Mexican building materials giant 643 CEMEX has seen a near tenfold year-on-year increase in net income in Q1 2017. The global industry heavyweight’s net income improved to US$336 million, compared to a net income of $35 million in the same three-month period last year.

On a like-for-like basis, CEMEX’s consolidated net sales increased by 6% during the first quarter of 2017, to $3.1 billion. This was said by the company to be due to higher product prices in most of its operations, as well as higher volumes in Mexico and its Europe and South, Central America and Caribbean regions.

CEMEX operating earnings increased by 3%, on a like-for-like basis, in Q1 2017, to $351 million. Operating EBITDA on a like-for-like basis increased by 2% during the quarter, to $559 million, compared with the same period in 2016, while operating EBITDA margin decreased by 0.5% on a year-on-year basis, reaching 17.8%.

Fernando A. Gonzalez, CEMEX’s chief executive officer, said: “We continued to see favourable results from our value-before-volume strategy during the quarter. Sequential and year-over-year pricing increased in the low-to-mid-single digits for our three core products.

“This, together with favourable volume dynamics in Mexico and our Europe and South, Central America and Caribbean regions, led to solid growth in consolidated sales and operating EBITDA, on a like-for-like basis. In addition, net income increased close to tenfold during the quarter.”

Gonzalez said CEMEX reduced its total debt by $470 million in Q1 2017, adding: “This debt level is more than $2.7 billion lower than that at the end of 2015, representing a reduction of close to 18. We have about $230 million of announced asset sales pending to close. This, plus free cash flow generation during the rest of the year should help us continue to de-lever, reach our debt reduction target for this year, and bring us closer to an investment-grade capital structure.”