Mexico: Cemex Expects 11% Sales Increase and 22% EBITDA Growth

Market analysts forecast a robust performance for Cemex in the fourth quarter of last year, with sales and EBITDA expected to rise.

Mexico: Cemex Expects 11% Sales Increase and 22% EBITDA Growth
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Cemex, one of the leading cement manufacturers, is anticipated to report a significant increase in its financial performance for the fourth quarter of the previous year. According to a consensus of market analysts published by the company, Cemex's sales are expected to reach $4.285 billion, marking a 10.77% increase compared to $3.869 billion reported in the same period of 2022. Furthermore, the operation flow (EBITDA) is projected to grow by 22%, from $630 million to $769 million year-over-year.

Analysts attribute this positive outlook to the solid performance in cement prices, which is expected to offset the weak volume behavior. Gerardo Cevallos, an analyst at Vector, projects a 9.7% annual increase in revenue in dollars and a 23.1% increase in operation flow for the last quarter of the previous year. Despite facing a fiscal charge due to an unfavorable court ruling in Spain, Cemex's net profit is expected to be impacted, yet the company's EBITDA for 2023 is estimated to be 2.4% higher than its annual guidance.

The revenue boost is primarily driven by higher prices, compensating for lower sales volumes. Cost inflation deceleration, particularly in fuel prices, operational efficiencies, and a greater contribution from growth-directed investments, are also supporting the EBITDA growth. For the operations in the United States and Mexico, similar trends from previous quarters are expected, albeit with a slight deceleration in price increases.

Elisa Vargas, an analyst at Grupo Financiero Ve Por Más, estimates sales of $4.299 billion, a 9.32% annual increase, and an operation flow of $750 million, 18.89% more than in the fourth quarter of 2022. For the current year, stable volumes are expected without increases, and one or two price hikes might occur. The U.S. infrastructure plan could boost volumes, with significant benefits expected in 2025, while Mexico will continue to benefit from nearshoring.

El Financiero