|CEMEX Provides Guidance for the First Quarter of 2006 |
CEMEX, S.A. de C.V. (NYSE: CX) announced today that it expects EBITDA for the quarter ending March 31, 2006 to be about US$800 million, an increase of about 26% versus the year earlier period, while operating income is expected at about US$550 million, 25% higher than the same period a year ago. For the first quarter, CEMEX expects net sales in excess of US$3.9 billion, an increase of 51% versus the same period a year ago. These results include the effect of consolidating the RMC group starting March 1, 2005. On a pro-forma basis, including the effect of the RMC consolidation for January and February 2005, net sales and EBITDA for this quarter are expected to increase 9% and 23%, respectively, in U.S.-dollar terms when compared to the same quarter last year.
Rodrigo Trevino, Chief Financial Officer, said: "Our main markets continue to show strong operating performance, increasing our confidence that we will achieve our stated target EBITDA of US$4 billion for this year. We now expect our free cash flow after maintenance capital expenditures to exceed US$2.5 billion in 2006, as we incorporate the effect of the settlement of the U.S. import tariffs on Mexican cement. We are investing about US$500 million during the year to capture EBITDA-growth opportunities in our existing markets. In the absence of acquisitions that meet our investment criteria, we will continue to use free cash flow to reduce debt."
During the first quarter, CEMEX expects cement and ready-mix sales volumes in Mexico to increase 7% and 30%, respectively, versus the same period last year. Adjusting for the additional business days in the quarter, volumes would be expected to increase 3% and 25%, respectively, when compared to the same period a year ago. Cement volumes continue to be driven by increased demand from the infrastructure sector and by a strong formal housing sector. The self-construction sector continues to show slow growth as housing demand is being satisfied in part by the formal sector.
Cement and ready-mix sales volumes for CEMEX's operations in the United States are expected to increase about 15% and 52%, respectively, during the first quarter compared to the same quarter of last year. This increase includes the effect of the consolidation of RMC's operations for the three months of the first quarter of 2006 and for the month of March of 2005, as well as the sale of assets completed on March 31, 2005. On a like-to-like basis for the ongoing operations, cement and ready-mix sales volumes are expected to increase about 15% and 4%, respectively.
In the United States, the main drivers of cement and ready-mix consumption continue to be the industrial-and-commercial and the public sectors. Although the residential sector is showing signs of moderate decline, it is still having a very strong performance in this first quarter compared to the same quarter last year. The most dynamic regions in the quarter have been the South Central and South Eastern regions. Additionally, some regions of the United States are having unusually dry and warm weather which has further increased demand for cement.
Cement and ready-mix sales volumes for CEMEX's operations in Spain are expected to increase about 8% and 35%, respectively, versus the first quarter of last year. Adjusting for the additional business days in the quarter and, in the case of ready-mix, the integration of the Readymix Asland assets after the termination of the joint venture with Lafarge, cement and ready-mix volumes would be expected to increase 4% and 8%, respectively. The main drivers of cement and ready-mix demand in Spain continue to be a strong residential sector, as well as a healthy public-works sector.
In the United Kingdom, cement and ready-mix sales volumes for the first quarter are expected to increase by about 2% and 5%, respectively, versus RMC's volumes for the first quarter of last year. The recovery in construction output in the country is being driven by public spending, including spending in infrastructure and housing. The industrial-and-commercial sector is also expected to have a favorable performance during the year. Favorable weather conditions in the opening months of the year also contributed to cement and ready-mix consumption in the first quarter.
For more information, visit www.cemex.com.
for CEMEX, S.A. de C.V.
Jorge Perez, (52 81) 8888-4334
Abraham Rodriguez, (52 81) 8888-4262
Ricardo Sales, 212-317-6008
Source: Business Wire (March 16, 2006 - 6:02 PM EST)
News by QuoteMedia