During the fourth quarter of last year, cement sector companies listed on the Mexican Stock Exchange (BMV) reported a negative outcome, affected by lower cement volumes, reported the analysis department of Grupo Financiero Ve Por Más (GFBX+).
Vector analyst Gerardo Cevallos predicted a 4.6 percent decline in revenues and a 6.5 percent drop in Ebitda for Cemex, with a low single-digit annual decrease. He explained that the depreciation of the Mexican peso, the increase in electricity costs in Mexico, and the slowdown in government construction jobs contributed to this decline.
In Mexico, preliminary data from Inegi for October and November indicate a 3.5 percent drop in the volume of gray cement sales compared to the previous year. On the other hand, the price of cement increased in the last quarter of 2024.
Regarding GCC, an annual sales decline of 1.6 percent is expected, but it could be less than anticipated due to the slowdown of projects in Mexico and the United States, caused by the election year, the decrease of nearshoring projects, and the volatility associated with the new U.S. administration.
The residential sector in the United States will continue to be impacted by interest rates, which could result in a decrease in volumes and cement sales in that region. The winter season and the uncertainty related to the new administration would also affect the results.
GFBX+ analysis indicated that Cemex had a challenging quarter, with stable or slightly lower cement volumes, and prices insufficient to offset that decline. The company's operating cash flow is expected to be 4.5 percent below the same period in 2023.
For Mexico, a quarter of lower growth is anticipated due to the high comparison base in the second half of the year and the slowdown in infrastructure. In the United States, weather impact is expected, which could result in similar or slightly lower volumes than the previous quarter.
