Mexico's Cemex beats estimates as prices rise, costs soften

By Kylie Madry

MEXICO CITY, May 2 (Reuters) - Mexican cement maker Cemex saw its net profit rise 14% in the first quarter compared to the year-ago period, the company reported Tuesday, as material cost inflation eased and price hikes paid off.

Cemex's net profit climbed to $225.45 million, up from the $198.08 million reported in the first quarter of 2022.

"This quarter marks an important inflection point," Chief Executive Fernando Gonzalez said in a statement, as the company has worked to recover earlier margins dinged by rising expenses.

Revenues increased 8% year-over-year to $4.04 billion, Cemex said, topping the analyst consensus of $3.99 billion.

The bump comes despite volumes in all of the company's product divisions dropping.

Operating expenses rose slightly compared to the same quarter last year to 21.2% of revenues, mainly on higher administrative expenses, Cemex said.

In Mexico, cement volumes dropped as customers turned to alternatives after price hikes in Cemex's bagged cement, the company said. Local prices for gray cement rose 17% year-over-year in the country, while ready-mix concrete rose 24%.

In the United States, the drop in volumes was largely due to inclement weather, which snarled construction, Cemex added.

The producer's operating earnings before interest, tax, depreciation and amortization (EBITDA), or core earnings, rose 7% to $732.67 million, far ahead of the consensus of $664.74 million.

A $40 million boost in EBITDA came from Cemex's growth investments and "urbanization solutions" segment, which targets sustainable city development, the firm said. (Reporting by Kylie Madry)