Mexican building materials giant CEMEX says its efforts to mitigate the impact of the COVID-19 pandemic by locking down much of its facility footprint was a key factor behind a Q2 2020 sales dip of 10% and an EBITDA fall of 6% to US$554 million.
However, the company says its EBITDA margin was up by 0.7 percentage points to 19% due to the proactive initiatives under ‘Operation Resilience’, where CEMEX undertook significant coronavirus-induced cost containment efforts across its businesses and geographies.
CEMEX says its consolidated second-quarter 2020 sales decline included lower volumes for the firm’s three core products in almost all regions. The U.S. was the one exception with cement sales growing 6%. The impact on sales was also highly correlated to government COVID-19 restrictions.
Operating earnings before other expenses, net, decreased 17% to $279mn on a like-to-like basis. Controlling net interest income (loss) was a loss of $44 million, compared with a net income of $155mn in the same quarter of 2019.
Fernando A. González, CEO of CEMEX, said: “Despite the unprecedented conditions in which we are operating due to the pandemic, I am pleased with our second-quarter performance and our quick reaction to implement cost-containment measures across all geographies. In the quarter, we saw a rapid V-shaped volume recovery in our core products from trough levels in April, reaching slightly below pre-COVID-19 volumes in June. Importantly, our health initiatives have helped protect our employees, customers, suppliers and communities, and allowed us and our customers to continue operating in most markets.
“Our digitalisation efforts have also paid off as usage continues to expand on our digital platforms, and our sales force has leveraged new tools to connect with our customers virtually. We expect that COVID-19 will continue to challenge our operations in new ways over the next few quarters. We will continue to prioritise the safety of our employees and customers, improve our customer experience, and protect the future of our company.”
CEMEX net sales in Mexico decreased by 10% on a like-for-like basis to $568mn. Operating EBITDA, on a like-for-like basis, fell 10% to $183mn in the quarter, versus the same period of the previous year.
CEMEX’s operations in the United States reported net sales of $1bn, an increase of 1% from the same period in 2019. Operating EBITDA increased by 16% to $198mn versus the same quarter of 2019.
In our Europe, Middle East, Africa and Asia region, CEMEX net sales decreased by 13% on a like-for-like basis, compared with the same period of the previous year, reaching $987mn. Operating EBITDA was $147mn for the quarter, 20% lower than the same period last year on a like-for-like basis.
CEMEX’s operations in our South, Central America and the Caribbean region, reported net sales of $279mn, a decline of 30% on a like-for-like basis over the same period of 2019. Operating EBITDA dropped by 25% on a like-for-like basis to $66mn in the second quarter of 2020, compared to Q2 2019.
