Cemex SAB de CV (CX) Q3 2024 Earnings Call Highlights: Record Net Income Growth Amid Weather ...

In This Article:

  • Asset Sales: $1.4 billion in asset sales announced in the quarter, with year-to-date divestitures totaling $2.2 billion.

  • EBITDA Contribution: Growth strategy contributed 13% of EBITDA.

  • Net Income Growth: Over 200% year-over-year increase in net income.

  • Weather Impact on EBITDA: Estimated $33 million impact due to extraordinary weather events.

  • Free Cash Flow Impact: Decline due to a $306 million tax payment related to a Spanish tax penalty.

  • Volume Decline: Consolidated volumes declined low to mid-single digits.

  • Price Increase: Consolidated prices rose low single digits.

  • EBITDA Margin: Urbanization solutions business margin rose 1.6 percentage points.

  • Fuel Cost Reduction: 23% decline in fuel cost per tonne of cement year-to-date.

  • Net Income for Nine Months: $891 million, 43% higher than last year.

  • Leverage Ratio: Stood at 2.22 times, slightly higher due to lower EBITDA and tax payment.

  • Full Year EBITDA Guidance: Adjusted to a low single-digit percentage decrease.

  • CapEx Guidance: Reduced by $100 million to $1.5 billion.

  • Cash Taxes Guidance: Reduced by $100 million to $900 million.

Release Date: October 28, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Cemex SAB de CV (NYSE:CX) announced $1.4 billion in asset sales in the quarter, contributing to a total of $2.2 billion in divestitures year-to-date, aligning with their strategy to focus on developed markets.

  • The company's growth strategy, primarily focused on the US, contributed 13% of EBITDA in the quarter, showcasing its effectiveness.

  • Net income showed exceptional strength, growing over 200% year-over-year.

  • Cemex SAB de CV (NYSE:CX) continues to make progress in decarbonization, with a 3% reduction in Scope 1 emissions year-to-date and significant advancements in carbon capture projects.

  • The aggregates business in the US is now the largest contributor to profitability, accounting for 36% of EBITDA with margins in excess of 30%.

Negative Points

  • The company's financial results were significantly impacted by extraordinary weather events, with an estimated $33 million impact on EBITDA.

  • Consolidated volumes declined between low to mid-single digits due to adverse weather conditions and a slowdown in construction activity in key markets.

  • Free cash flow after maintenance CapEx declined due to a one-off $306 million tax payment related to a Spanish tax penalty.

  • The Mexican peso's significant depreciation posed a headwind to EBITDA.

  • Electricity costs in Mexico rose by 30% due to transitioning power supply sourcing, impacting margins.

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