CHIHUAHUA, Mexico, April 23, 2019 (GLOBE NEWSWIRE) — Grupo Cementos de Chihuahua, S.A.B. de C.V. (BMV: GCC*), a leading producer of cement and concrete in the United States and Mexico, today announced its results for the first quarter 2019.
- Extraordinary winter season adversely impacted most markets in the U.S.
- Consolidated Net Sales decreased 1.9% to US$ 163.4 million in 1Q19, mainly driven by lower cement and concrete volumes in the U.S. on continued inclement weather conditions
- Net sales rose 8.1% in Mexico on volume and price increases
- EBITDA decreased 16.0% to US$ 38.3 million and EBITDA margin was 23.4%
- Net leverage (Net debt/EBITDA) ratio decreased to 1.74x in March 2019, from 1.83x in March 2018
- Completion of Rapid City plant expansion tie-in process, operational ramp up in progress
- Oil well cement demand in West Texas area remains strong on rising oil prices
- Fitch Ratings raised GCC´s credit rating to ‘BB+’ from ‘BB’
- Corporate Technical and Operations Office (CTOO) initiated operations with the goal of supporting our growth strategy, improving our operations and enhancing the development of GCC
Enrique Escalante, GCC’s Chief Executive Officer, commented: “The underlying trends in our business are strong in each of the markets where we operate in the U.S. and Mexico. The U.S. operations slowed with severe inclement weather continuing into the first quarter. However, there is a strong backlog and we are picking up the pace as the weather conditions improve. We expect to end the year in line with our guidance as the first quarter historically represents around 12% of the results for the year. In Mexico we turned in sales of 8.1% on increased volumes and prices and on top of the more than 18% increase in the prior year’s first quarter. Chihuahua continues to outperform stronger than what we anticipated, driven primarily by robust mining shipments, industrial maquiladora plants and warehouse construction and middle-income housing starts.
Looking forward, increasing oil prices and the opening of new pipelines are expected to drive further demand for oil well cement used in new rigs in the West Texas area while infrastructure and reconstruction projects in El Paso, Texas, Las Cruces, New Mexico and Colorado will see increased construction through 2020. While the operational ramp up of our South Dakota cement plant in Rapid City continues at a slower pace than expected as we are undergoing a stabilization process, we are already realizing synergies from the Trident plant acquisition through consolidating customers and establishing a strong position in Canada.”
Mr. Escalante continued, “As we ramp up volumes throughout the year and continue to improve other areas of our cost structure, such as energy and freight, we will continue improving margins. With the energy reform in Mexico, we have put in place a plan to significantly reduce our energy costs in that country. We are in the final stages of selecting a power generator to supply energy on a long-term basis and expect to see these savings in 2020. We are also in the process of evaluating a renewable energy project to complement our new energy supplier. Our balance sheet remains strong and Fitch Ratings raised the Company’s local and foreign currency Issuer Default Ratings to BB+ from BB and also upgraded our US$260 million senior notes due 2024 to BB+ from BB.”
KEY FIGURES (millions of dollars)
|1Q19||1Q18||1Q19 vs. 1Q18|
|Operating Income before Other Expenses||11.0||26.0||-57.7%|
|Free Cash Flow**||(22.4)||(10.6)||111.5%|
|Income before discontinued operations||3.9||11.8||-66.8%|
|Earnings per Share (US$)***||0.0117||0.0340|
*EBITDA: operating income before other expenses + depreciation and amortization. **Free Cash flow before expansion CapEx
***Earnings per share calculated based on average number of outstanding shares during the quarter
GCC’s first quarter 2019 earnings report is available at www.gcc.com, on the Investor Relations page.
Grupo Cementos de Chihuahua, S.A.B. de C.V. will host its earnings conference call on April 24, 2019.
Time: 11:00 am (Eastern Time) / 10:00 am (Mexico City) / 09:00 am (Mountain Time)
Conference ID: 1017196
|U.S.:||1-800-239-9838 Toll Free|
|Replay (through May 1, 2019):|
|U.S.:||1-844-512-2921 Toll Free|
Listen-only webcast and replay: click here.
GCC is a leading supplier of cement, concrete, aggregates, and construction?related services in the United States and Mexico, with an annual cement production capacity of 5.8 million metric tons. Founded in 1941, the Company’s shares are listed on the Mexican Stock Exchange under the ticker symbol GCC*. GCC is included in the MSCI family of indexes and the benchmark S&P/BMV IPC index of Mexican stocks.
Forward Looking Statements
This press release may contain forward-looking statements. All statements that are not clearly historical in nature are forward-looking, and the words “anticipate,” “believe,” “expect,” “estimate,” “intend,” “project” and similar expressions are generally intended to identify forward-looking statements. These statements are subject to risks and uncertainties including, among others, changes in macroeconomic, political, governmental or business conditions in the markets where GCC operates; changes in interest rates, inflation rates and currency exchange rates; performance of the construction industry; pricing, business strategy, and other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from the beliefs, projections, and estimates described herein. GCC assumes no obligation to update the information contained in this press release.
For further information, contact:
|GCC Investor Relations:|
+52 (614) 442 3176
+ 1 (303) 739 5943