Cemex Reports Improved Outlook, Shares Climb
Cemex SAB shares soared as the Mexican construction materials giant expressed optimism about cement demand in its largest market, the United States.
Key Highlights:
* Annual net sales fell 1% to $16.2 billion due to lower volumes, despite higher prices.
* Hurricane and Texas winter storm impacted US business in 2024.
* Company anticipates growth from US infrastructure and manufacturing projects.
* US-listed shares jumped as much as 8.7% after earnings report.
Cost-Cutting Initiatives and Financial Performance:
* Cemex aims to reduce costs by $350 million through "Project Cutting Edge."
* Earnings expected to rise by $150 million this year.
* Operating earnings increased 3% to $681 million on a like-for-like basis.
Market Outlook and Risks:
* Cemex faces weaker global demand and political uncertainty in key markets.
* Company has been implementing price increases and selling non-core assets.
* Currency hedging program mitigates impact of strong dollar and foreign exchange volatility.
* US President Donald Trump's tariffs and resulting volatility remain a potential risk.
Mexico and Other Developments:
* Cemex benefits from public infrastructure projects in Mexico.
* Company predicts a challenging first half of 2025 in Mexico.
* Investment grade rating was restored by S&P Global Ratings in March 2024.