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June 4, 2010
Share ThisAlthough, CEMEX, S.A.B. de C.V. (CX) reiterated its guidance for the fiscal year 2010, the alteration in the exchange rates as in the decline of Mexican Peso against U.S. Dollar reduced its outlook.
For fiscal 2010, Cemex expects EBITDA to be approximately US$2.75 billion lowering from US$ 2.9 billion expected earlier. Free cash flow after maintenance capital expenditure is expected to be approximately US$800 million. Out of which, Cemex will use US$450 million to reduce its debt of US$15,005 million.
However, the exchange rate fluctuations will be favorable to Cemex to a certain extent. Its total debt will decline by US$550 million. Further, Cemex is making genuine efforts to reduce net debt. Yet, the continued weak cement volumes in Spain and the U.S. remain a problem. Moreover, the overall economic situation is still uncertain.
Recent economic news and activity might have suggested a technical end to the recession, but the conditions facing the construction industry are likely to remain weak for another year, causing a drag on cement consumption, according to the most recent economic forecast from the Portland Cement Association (PCA).
For 2010, CEMEX anticipates total volume to bloat by 1%, including 3% increase in cement volume while a slight decrease in ready-mix volume.
PCA expects United States’ total cement consumption to increase only 5% in 2010. However, a significant growth in consumption is expected in 2011 and beyond.
Read the full analyst report on "CX"
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