Thursday evening, building materials supplier Cemex, S.A.B. de C.V. (CX) reported a net loss for the fourth quarter, compared to a profit in the prior-year period, hurt by lower operating income, loss on financial instruments and an impairment expense. Net sales for the quarter dropped 23% from a year ago on weaker than expected demand weaker than in most of the company's geographies and market segments.
The Mexico-based company reported majority net loss for the fourth quarter of US$707 million compared to majority net income of US$538 million in the previous-year quarter.
Consolidated net sales for the latest quarter declined to US$4.5 billion from US$5.8 billion a year ago. The company attributed the lower sales in the quarter primarily to lower volumes, which were partially offset by better price resiliency in most of its markets. On average, six analysts polled by First Call/Thomson Financial expected the company to report revenues of US$4.79 billion.
In December, Cemex had forecast a 10% drop in fourth-quarter sales on a like-to-like basis and a 23% decline on a reported basis. The company said at that time that volumes continued to be affected by significantly weaker-than-expected demand in most of its geographies and market segments. Noting that overall construction activity weakened further and credit availability tightened, the company said it continued to see supply-demand resilience in the U.S. and Spanish markets.
EBITDA for the latest quarter fell 27% to US$808 million, while operating income dropped 35% to US$384 million.
Free cash flow after maintenance capital expenditures for the fourth quarter was US$474 million, down 29% from the same period last year.
Hector Medina, Executive Vice President of Planning and Finance of Cemex said, "The year 2008 was one of extraordinary volatility in the financial markets and economic weakness that continues to spread throughout the global economy and the fourth quarter was one of the most difficult quarters in recent history. In response to the challenging times we are facing, we remain focused on paying down debt and improving the efficiency of our operations in order to strengthen our financial structure."
For the fourth quarter, net sales in Mexico declined 13% from the prior-year quarter to US$820 million. EBITDA decreased 14% to US$302 million.
In the U.S. sales for the quarter dropped 32% from the corresponding period last year to US$983 million, while EBITDA declined 55% to US$129 million.
Operations in Spain experienced a 49% drop in net sales to US$247 million, when compared with the same period last year. EBITDA decreased 59% to US$60 million.
Net sales for the quarter in the U.K. slid 36% from the prior-year period to US$318 million, while EBITDA was a loss of US$19 million.
Meanwhile, net sales in the Rest of Europe region decreased 11% to US$922 million. EBITDA declined 15% from the same period last year to US$82 million.
Operations in South/Central America and the Caribbean region reported a 28% decline in net sales to US$378 million, while EBITDA decreased 29% for the quarter to US$121 million.
In the Asia and Australia region, net sales declined 18% to US$424 million, while EBITDA decreased 6% from the prior-year period to US$76 million.
However, net sales in Africa and the Middle East region surged 46% to US$278 million, while EBITDA more than doubled to US$72 million.
For fiscal year 2008, the company's majority net income plunged 92% to US$203 million from US$2.4 billion in the previous year.
Consolidated net sales for the year were US$21.7 billion, flat with the prior year. Analysts had a consensus revenue estimate for the year of US$22.17 billion.
EBITDA for the full year declined 5% to US$4.3 billion, while operating income declined 16% to US$2.5 billion.
CX closed Thursday's regular trading session at $7.98, down $0.92 or 10.34% on a volume of 10.75 million shares.
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