CEMEX report tenfold increase in net income

09 February, 2017

Company delivers strong 2016 results despite continued market volatility and uncertainty

CEMEX announced today that their consolidated net sales, on a like-for-like basis, increased by 4% for the full-year 2016 to US$13.4 billion, compared with 2015, while net income in 2016 improved tenfold to US$750 million from US$75 million the previous year and was the highest net income generation since 2007.

Operating EBITDA on a like-for-like basis increased by 15% for the full-year 2016 to US$2.7 billion and was the highest achieved since 2008, while operating EBITDA margin increased to 20.5%, up 1.7 percentage points from 2015 and the highest achieved since 2007.

Free cash flow after maintenance capital expenditures for the full-year 2016 reached US$1.7 billion, an increase of 91% versus the previous year and the highest since 2008, while asset sales reached approximately US$2 billion, of which slightly above US$1 billion closed during 2016.

Commenting on the results, CEMEX’s chief executive officer, Fernando A. Gonzalez (pictured), said: ‘2016 was a very good year for CEMEX. Despite continued volatility and uncertainty in the markets, we were able to deliver strong underlying operational and financial results by remaining focused on the variables that we control.

‘As a result of our favourable volume and price performance, sales increased by 4% in 2016, while operating EBITDA grew by 15% on a like-for-like basis. Our free cash flow after maintenance capex was close to US$1.7 billion; almost double last year’s level. This was driven by higher EBITDA generation as well as our initiatives to reduce interest expense, maintenance capex and working capital investment.

‘In line with our stated objective to reach an investment grade capital structure as soon as possible, we applied the proceeds from our free cash flow generation and asset sales mainly for debt reduction. Our total debt is close to US$2.3 billion lower than that at the end of 2015. This represents a 15% reduction from the debt level as of the end of 2015 and a 25% reduction since the end of 2013.

‘We are also pleased that S&P Global Ratings recognized our discipline and consistency in reducing our leverage with an improvement in our credit rating, which should further enhance our financial flexibility and reduce our cost of capital.’