Latest news with #ProjectCuttingEdge
Yahoo
25-07-2025
- Business
- Yahoo
Cemex SAB de CV (CX) Q2 2025 Earnings Call Highlights: Strong Net Income Growth and Strategic ...
EBITDA Savings: Expected to reach $200 million for the year, with a run rate of $400 million by 2027. Net Income: Increased by 38% due to strong FX rates and lower interest expense. Free Cash Flow from Operations: Slightly over $200 million for the quarter. Energy Costs: Declined by 14% on a ton of cement basis. Leverage Ratio: Stood at 2.05 times as of June. Revenue from Discontinued Operations: Contributed to record debt income of $1.05 billion for the first six months. Pricing Strategy: Cement, ready-mix, and aggregate prices increased by 5%, 6%, and 8% respectively since the beginning of the year. US Aggregate Prices: Increased by 5% in the first half compared to Q4 2024. EMEA Region Performance: Achieved highest first half EBITDA in recent history with a margin expansion of almost 3% points. Mexican Peso Hedging Strategy: Fully covers operating cash flow for Mexico. Interest Expense Reduction: Expected to decline by $125 million in 2025. Warning! GuruFocus has detected 7 Warning Sign with CX. Release Date: July 24, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Cemex SAB de CV (NYSE:CX) exceeded internal expectations for the second quarter, with consolidated EBITDA outperforming projections. The company has implemented a strategic plan focused on operational excellence and shareholder returns, which includes a comprehensive roadmap and a new capital allocation model. Cemex SAB de CV (NYSE:CX) anticipates significant EBITDA savings, expecting $200 million in 2025 and a run rate of $400 million by 2027, primarily from headcount reductions and operational efficiencies. The EMEA region showed strong performance with volume recovery and margin expansion, marking four consecutive quarters of earnings recovery. The company is optimistic about future growth, particularly in the US and Europe, driven by infrastructure projects and strategic M&A transactions aimed at boosting earnings. Negative Points Cemex SAB de CV (NYSE:CX) faced challenges in Mexico due to difficult prior year comparisons and high levels of precipitation affecting volumes. The US market experienced a decline in volumes due to high precipitation and continued weakness in the residential sector. The Mexican peso remained a headwind, impacting EBITDA despite some offset from other currency appreciations. Free cash flow from operations was affected by severance payments, lower EBITDA, and higher working capital investment. The company acknowledges the volatility and lack of visibility in its main markets, which could impact future performance. Q & A Highlights Q: Can you elaborate on the additional savings identified for Project Cutting Edge and your confidence in achieving the $400 million target by 2027? A: The additional $50 million in savings primarily comes from transforming our organization, particularly through overhead headcount reductions. We are confident in achieving the $400 million target by 2027, as we have reviewed all initiatives to ensure they are recurrent. Out of the $400 million, $200 million relates to direct overhead personnel, with additional savings from indirect and non-personnel overheads, as well as operational efficiencies. Q: Could you provide more details on your strategy for building a shareholder return platform and your core market focus? A: Our strategy involves capital allocation decisions that prioritize shareholder returns. We plan to progressively increase dividends and consider opportunistic share buybacks as early as next year. Our core focus remains on the US, Mexico, and Europe, with potential divestitures in the South-Central America and Caribbean (SAC) region, which we consider "core-ish." Q: What are the key levers for free cash flow generation, and how do you plan to achieve structural improvements? A: We are working on multiple fronts, including reducing CapEx, achieving incremental savings from Project Cutting Edge, and boosting free cash flow from strategic CapEx projects. We also aim to reduce interest expenses and improve operational excellence. Portfolio rebalancing will take longer, but we have identified opportunities to enhance free cash flow conversion at a micro-market level. Q: Can you explain the new corporate structure and operating model, and how it supports improved free cash flow conversion? A: We are decentralizing operational excellence initiatives to the line, discontinuing centrally led initiatives, and boosting collaboration across regions. This approach optimizes resources, reduces costs, and enhances operational excellence, ultimately supporting improved free cash flow conversion. We aim to achieve a free cash flow conversion rate similar to industry peers by 2027. Q: What is the outlook for pricing trends in Mexico and the US for the rest of the year? A: In Mexico, we implemented a price increase effective July 1, expecting an $8 to $10 per ton increase. Year-to-date, ready-mix prices are up 7%, and aggregates are up 8%. In the US, we do not anticipate further cement price increases this year, with aggregates expected to remain around a 5% to 6% increase. Our pricing strategy aims to offset input cost inflation. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
30-04-2025
- Business
- Yahoo
Why CEMEX, S.A.B. de C.V. (CX) Surged on Monday
We recently published an article titled . In this article, we are going to take a look at where CEMEX, S.A.B. de C.V. (NYSE:CX) stands against the other stocks. The stock market kicked off the trading week on a mixed note, with two major indices ending in the green, as investors continued to digest more corporate earnings results. Among the bellwether indices, only the Nasdaq ended in the red, dropping 0.10 percent. In contrast, the Dow Jones grew by 0.28 percent and the S&P 500 inched up by 0.06 percent. Meanwhile, 10 companies mirrored a broader market optimism, as investors snapped up shares ahead of their first-quarter earnings performance in the next few days. To come up with the list, we considered only the companies with a $2-billion market capitalization and $5-million trading volume. A pile of cement on the top of the wheelbarrow in construction site. CEMEX, S.A.B. de C.V. (NYSE:CX) extended its winning streak for a fifth straight day on Monday, adding 4.56 percent to close at $6.19 apiece, as investors took heart from the company's strong performance and its new CEO's promise to deliver further profit growth and shareholder value. In a statement, CEMEX, S.A.B. de C.V. (NYSE:CX) CEO Jaime Muguiro said that he will focus on operational efficiency and follow a disciplined capital allocation strategy. Through the 'Project Cutting Edge' cost savings initiative, CX aims to save at least $150 million in recurrent annual EBITDA this year and $350 million by 2027. The announcement followed CEMEX, S.A.B. de C.V.'s (NYSE:CX) strong earnings performance in the first quarter of the year, with its net income soaring by 189 percent to $734 million from $254 million in the same period a year earlier, driven mainly by the sale of its Dominican Republic operations. Revenues, on the other hand, dipped by 1 percent to $3.6 billion from $3.9 billion amid higher prices that offset lower volumes. Overall CX ranks 10th on our list of the best performing stocks on Monday. While we acknowledge the potential of CX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CX but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: and . Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
29-04-2025
- Business
- Yahoo
Cemex SAB de CV (CX) Q1 2025 Earnings Call Highlights: Record Net Income and Strategic ...
Net Sales: Resilient performance with pricing strategy partially mitigating volume declines in Mexico and the US. EBITDA Margin: Supported by higher prices, lower energy and freight costs, partially offset by volume impact and higher labor costs. Net Income: Record net income driven by the gain on divestment of Dominican Republic operations. Free Cash Flow: Impacted by lower EBITDA, severance payments, and discontinued operations; expected to improve throughout the year. Pricing Strategy: Cement and ready-mix prices rose 2%, aggregate prices increased by 4% sequentially. CO2 Emissions: Reduced net CO2 emissions per ton of cement equivalent by 1.6% year-over-year. Energy Costs: Declined by 17% per ton of cement, contributing to cost savings. Leverage Ratio: Stood at 1.9 times, slightly higher than December. Project Cutting Edge: Expected to realize recurring yearly EBITDA savings of at least $350 million by 2027, with $150 million expected in 2025. Urbanization Solutions Portfolio: EBITDA growth of 16% in South, Central America, and the Caribbean region, with margin expansion of more than 4 percentage points. Warning! GuruFocus has detected 3 Warning Sign with CX. Release Date: April 28, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Cemex SAB de CV (NYSE:CX) appointed Jaime Muguiro as the new CEO, bringing nearly three decades of experience within the company. The company is implementing Project Cutting Edge, a cost savings program expected to deliver recurring yearly EBITDA savings of at least $350 million by 2027. Cemex SAB de CV (NYSE:CX) reported record net income, primarily driven by the gain on divestment of its Dominican Republic operations. The company achieved a 1.6% reduction in net CO2 emissions per ton of cement equivalent year-over-year, aligning with its decarbonization goals. Cemex SAB de CV (NYSE:CX) is focusing on enhancing shareholder returns through a balanced capital allocation policy, including potential share buybacks and progressive dividends. First-quarter results were impacted by peso depreciation, resulting in a $65 million headwind for the Mexican operations. Adverse winter conditions in the US and Eastern Europe negatively affected the company's results. The company faced a challenging demand environment in Mexico, with a significant decline in cement volumes due to a strong pre-election comparison base. Free cash flow was impacted by lower EBITDA, severance payments, and the effect of discontinued operations. The urbanization solutions portfolio experienced a 14% decline in sales, although EBITDA margin expanded slightly. Q: Jaime, could you provide more details on the cost reduction potential of Project Cutting Edge and your focus areas for geographical mix and investments? A: Jaime Muguiro, CEO: Yes, Project Cutting Edge is just the beginning. We are focusing on significant savings in supply chain, logistics, and procurement. We aim to reduce overheads and empower regions to improve margins. Geographically, we will continue focusing on Mexico, the US, and Europe, optimizing CapEx and potentially divesting assets that do not meet our return criteria. Q: Can you elaborate on how Project Cutting Edge aligns with investor interests and any specific KPIs you plan to implement? A: Jaime Muguiro, CEO: Yes, we plan to introduce EBIT free cash flow conversion and ROCE over WACC as key performance indicators. These will be integrated into executive compensation and reviewed twice a year to ensure alignment with investor interests. Q: Will there be any strategic changes in the urbanization solutions segment under your leadership? A: Jaime Muguiro, CEO: We see great potential in certain verticals like mortars, stuccos, and circularity, particularly in Europe. We aim to responsibly grow our urbanization solutions business, focusing on Mexico, the US, and Europe, and exploring light side solutions. Q: Where do share buybacks rank in your capital allocation priorities? A: Jaime Muguiro, CEO: Share buybacks are part of our toolkit, approved for up to $500 million. We aim to enhance shareholder returns through progressive dividends and opportunistic buybacks, while also focusing on deleveraging and accretive acquisitions in the US. Q: How do you plan to address the potential impact of tariffs on cement imports? A: Jaime Muguiro, CEO: We are prepared to introduce a tariff surcharge if necessary and have flexibility to switch import sources, leveraging our Mexican network. We are also improving operational efficiency in the US to reduce reliance on imports. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
07-02-2025
- Business
- Yahoo
Why Cemex SAB de CV (CX) Advanced on Thursday
We recently compiled a list of the In this article, we are going to take a look at where Cemex SAB de CV (NYSE:CX) stands against the other stocks. Wall Street's main indices ended mixed on Thursday, with the Dow Jones the sole decliner, losing 0.28 percent. In contrast, both the S&P 500 and the Nasdaq Composite registered gains, rising by 0.36 percent and 0.51 percent, respectively. Amid the earnings season, 10 companies saw significant increases in their valuations, thanks to stronger-than-expected earnings reports. Additionally, several firms enjoyed rallies fueled by newly secured deals. To come up with Thursday's biggest advancers, we considered only the stocks with at least $2 billion in market capitalization and $5 million in daily trading volume. A pile of cement on the top of the wheelbarrow in construction site. Cement manufacturer Cemex grew its share prices by 13.38 percent on Thursday to finish at $6.78 apiece as investors cheered the company's strong earnings performance last year. In a statement, Cemex said it achieved a 415-percent surge in net income in full-year 2024 at $939 million versus the $182 million registered in 2023 on the back of a lower effective tax rate coupled with gains from asset divestments. In the fourth quarter alone, Cemex swung to a net profit of $48 million versus a $441 million net loss in the same period a year ago. Meanwhile, consolidated net sales dipped by 1 percent to $16.2 billion while remaining flat in the fourth quarter as higher prices were offset by lower volumes in the market. As part of its savings program, Cemex launched what it calls Project Cutting Edge, a $350-million saving initiative for three years that aims to streamline operations and improve efficiency, while heavily leveraging digital technology. Overall CX ranks 3rd on our list of Thursday's biggest advancers. While we acknowledge the potential of CX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
