Mexico's Cemex posts double-digit profit rise as restructuring kicks in
Cemex's profit climbed 38% to $318 million, a bright spot as sales sagged 5% to $4.13 billion, and core earnings measured by EBITDA dropped 11% to $823 million. All figures were largely in line with estimates from analysts polled by LSEG.
The cement producer, one of the world's largest, saw fewer volumes in two of its top markets, Mexico and the United States. In Mexico, record rainfall and a slowdown in public infrastructure projects under the new administration weighed on performance. In the U.S., the decline was driven by heavy rains and a subtle residential construction sector.
Still, volumes in the Middle East and Africa surged amid new housing and infrastructure projects.
The results mark the first quarterly report under CEO Jaime Muguiro, who previously led Cemex's U.S. operations before taking over as group chief.
Muguiro, in a statement, detailed progress on Cemex's previously announced cost-saving program, adding "difficult decisions" had been taken in the quarter as headcount would come down further.
Cemex's workforce shrank 5% year-over-year to around 43,000 employees in the second quarter. Operating expenses came down 3%, mostly from lower spending in logistics and distribution.
Now, the cement and concrete maker expects a $200 million boost to its EBITDA this year from the cost cuts, up from a previously forecast $150 million. For the full year, Cemex expects its EBITDA to remain flat, though it does see potential for the metric to come in slightly higher.
By 2027, the spending cuts are expected to total $400 million, Cemex said, with layoffs alone contributing $200 million in annual savings.
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