14 August 2018

10 August 2018

08 August 2018


Colombia: DANE, Colombia's national department for statistics, has announced that sales of grey cement stood at 0.94Mt between January and June 2018, which represented an increase of 3.6% compared to the same period of 2017. A DANE report indicated a gradual recovery of the sector after a sales drop of 10% registered in March 2018. However, the Colombian Association of Concrete Producers (Asocreto) has predicted that consumption would close the year with similar results to those posted in 2017, when sales were lower than in 2015 and 2016.


US: The Federal Trade Commission (FTC) has approved a final order settling changes for Ireland’s CRH acquisition of Ash Grove Cement following a period for public comment. The FTC issued its consent for the transaction in June 2018 on the condition that CRH sell the Three Forks cement plant in Montana to Mexico’s Grupo Cementos de Chihuahua (GCC).

Also under the settlement, because the CRH cement plant in Montana currently sells a significant amount of cement into Canada through two CRH terminals in Alberta, GCC will have the option to use those terminals for three years. CRH also has agreed to purchase, at GCC’s option, cement produced at the plant for distribution in Canada for up to three years. The FTC also forced CRH to sell other assets in Montana, Nebraska and Kansas.




Mexico: The Mexican cement multinational Cemex has announced that is planning a new round of asset sales and debt reduction in a bid to speed up its growth and return to an investment-grade rating. It will reposition its portfolio to focus on markets with the greatest long-term growth potential.


By January 2021 Cemex aims to sell US$1.5-2.0bn in assets and reduce its total debt by US$3.5bn, while finding further cost savings of US$150m. It also plans to pay annual cash dividends starting with US$150m in 2019. Cemex has given a lot of money back to bond investors and banks in recent years and now is in a position to


compensate shareholders with dividends, in addition to recently approved buyback funds, according to Chief Executive Fernando González.


Cemex lost its investment-grade ratings in 2009 during the global financial crisis, when its earnings fell after the company had taken on large amounts of debt to expand through acquisitions. The company returned to profitability following major asset sales and debt reduction. In early 2018 it announced that it was thinking about expanding into growing markets, apparently indicating an end to asset sales. However, it abandoned these plans after a number of shareholders objected.


Debt reduction, cost cutting and asset sales of recent years were successful, but earnings before interest, taxes, depreciation and amortisation (EBITDA), a measure of cash flow, didn’t grow as much as expected, according to González. In addition to lower earnings in Colombia, Egypt and the Philippines, Cemex also faced rising fuel costs.


In the second quarter of 2018, Cemex’s net profit increased by 32% compared to the same period of 2017 to US$382m. Sales grew by 7% to US$3.8bn, and earnings before interest, taxes, depreciation and amortisation, (EBITDA) were up by 4% to US$714m. Cement sales in the same period increased by 4% to 18.6Mt.

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