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GCC Reports Fourth Quarter and Full Year 2018 Results

CHIHUAHUA, Mexico, Feb. 13, 2019 (GLOBE NEWSWIRE) -- Grupo Cementos de Chihuahua, S.A.B. de C.V. (BMV: GCC*) a leading producer of cement and ready-mix concrete in the United States and Mexico, today announces its results for the fourth quarter and full year of 2018.


  • Consolidated Net Sales decreased 3.9% to US$ 205.9 million in 4Q18, mainly driven by lower cement and concrete volumes in the U.S.
  • EBITDA decreased 16.9% to US$ 57.4 million and EBITDA margin was 27.9%
  • Net leverage (Net debt/EBITDA) ratio decreased to 1.59x in December 2018 from 1.86x in December 2017
  • EBITDA to Free Cash Flow conversion was 79%
  • Successful full integration of the Trident Plant in Montana, onboarding proceeding well, and significant synergies have been identified
  • Completion of Rapid City plant expansion tie-in process, operational ramp up in progress
  • Oil well cement demand remains strong despite challenging environment


  • Consolidated Net Sales increased 7.2% to US$ 883.2 million in FY18, mainly driven by higher sales volumes and prices in the U.S. and Mexico
  • EBITDA increased 6.7% to US$ 256.0 million. EBITDA margin contracted 10 basis points to 29.0%
  • EBITDA to Free Cash Flow conversion was 42%
  • Completion of a comprehensive new term loan agreement, replacing all existing bank debt while reducing interest expense with improved terms and conditions
  • S&P Global Ratings (S&P) long-term corporate rating raised to BB+ from BB, with a stable outlook. S&P also raised the rating on GCC’s senior unsecured notes due 2024 to BB+
  • GCC shares included within the Mexican Bolsa’s S&P/BMV IPC blue-chip index and within the MSCI family of stock indexes

Enrique Escalante, GCC’s Chief Executive Officer, commented: “We executed several transactions during 2018 which put GCC in a very solid position moving forward. We completed a purchase-sale transaction exchanging GCC’s ready-mix plants in Oklahoma and Northwest Arkansas, which were not integrated into our cement distribution network, for a cement plant in Montana representing a strategic addition to our system that will also improve our profitability. This plant, along with the completion of capacity expansion at our South Dakota cement plant in Rapid City, will enable us to continue to benefit from the robust pace of growth in the U.S. economy. Additionally, we further strengthened our balance sheet with a very efficient debt refinancing executed ahead of the Presidential elections in Mexico and which significantly improves our amortization schedule.

Despite the many challenges we experienced throughout the year, we delivered both strong operational results for 2018 and received positive customer feedback. While the one-time effect of our Rapid City tie-in delay adversely impacted fourth quarter results, this was resolved, and the operational ramp up is ongoing. Importantly, moving forward, GCC’s Rapid City plant will provide considerable benefits, addressing our prior capacity deficit with reduced logistics and production costs while enabling us to identify and service new customers without our prior limitations.”

“We are on the path of operational and financial transformation, as is evidenced by our recently announced Fitch upgrade from BB to BB+ with a stable outlook; further, over the past five years GCC has delivered 860 basis points of EBITDA margin expansion and we remain committed to achieving our long-term goals.”

Mr. Escalante continued, “GCC’s strong balance sheet and a robust free cash flow generation today make GCC one of the best positioned companies in the industry to capitalize on the growing U.S. economy, weather a challenging environment or act on potential strategic acquisitions aligned with our strict criteria that these be well-priced, complementary, integrated and value added.”

KEY FIGURES (millions of dollars)

  4Q18 4Q17 4Q18
2018 2017 2018
Net Sales 205.9 214.2 -3.9% 883.2 824.1 7.2%
Operating Income before other expenses 28.8 49.3 -41.6% 169.5 160.8 5.4%
EBITDA* 57.4 69.0 -16.9% 256.0 239.8 6.7%
EBITDA margin 27.9% 32.2%   29.0% 29.1%  
Free Cash Flow** 45.3 66.7 -32.1% 107.7 111.6 -3.5%
Income from continuing operations 21.3 27.8 -23.5% 104.5 78.7 32.7%
Discontinued operations 0.01 1.1   (41.0) 5.0  
Net Income 21.3 28.9 -26.4% 63.5 83.7 -24.2%
Earnings per Share (US$)*** 0.0641 0.0870   0.1909 0.2517  

*EBITDA: operating income before other expenses + depreciation and amortization.  **Free Cash flow before expansion CAPEX
 ***Earnings per share calculated based on average number of outstanding shares during the quarter


2019 Outlook    
United States  
Volumes Cement  4% -6%
  Cement, like-to-like  2% - 3%
  Concrete  6% - 8%
Prices (US$)    
  Cement 4% - 5%
  Concrete  2%  -4%
Volumes Cement =
  Concrete =
Prices (Ps.) Cement 3% - 5%
  Concrete 3% - 5%
EBITDA Growth    20% - 23%
EBITDA Growth without IFRS-16   12%- 15%
FCF Conversion Rate*   > 50%
Working Capital   Slight decrease
Total CapEx   US$ 70 million
  Maintenance $60
  2018 carry- over $10
Net Debt / EBITDA, end -year < 1x

*Free Cash Flow conversion rate: free cash flow after Maintenance capex/EBITDA


GCC’s fourth quarter and full year 2018 earnings report is available at www.gcc.com, on the Investor Relations page.


Grupo Cementos de Chihuahua, S.A.B. de C.V. will host its earnings conference call on February 14, 2019. 

Time:      11:00 pm (Eastern Time) / 10:00 pm (Mexico City) / 09:00 pm (Mountain Time) 

Conference ID: 8208114

Dial in:    

U.S.:                                (866) 575 6539 Toll Free

International:                   +1 (323) 994 2082

Replay (through February 21, 2019):

               U.S.:                                    (844) 512 2921 Toll Free

               International:                       +1 (412) 317 6671

Listen-only webcast and replay:  click here.


GCC is a leading supplier of cement, concrete, aggregates, and construction‐related services in the United States and Mexico, with an annual cement production capacity of 5.8 million metric tons. Founded in 1941, the Company’s shares are listed on the Mexican Stock Exchange under the ticker symbol GCC*. GCC is included in the MSCI family of indexes and the benchmark S&P/BMV IPC index of Mexican stocks.

Forward Looking Statements

This press release may contain forward-looking statements. All statements that are not clearly historical in nature are forward-looking, and the words “anticipate,” “believe,” “expect,” “estimate,” “intend,” “project” and similar expressions are generally intended to identify forward-looking statements. These statements are subject to risks and uncertainties including, among others, changes in macroeconomic, political, governmental or business conditions in the markets where GCC operates; changes in interest rates, inflation rates and currency exchange rates; performance of the construction industry; pricing, business strategy, and other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from the beliefs, projections, and estimates described herein. GCC assumes no obligation to update the information contained in this press release.

For further information, contact:

GCC Investor Relations:
Ricardo Martinez
+52 (614) 442 3176
+ 1 (303) 739 5943