Mexico's Cemex posts earnings drop, cuts operating profit forecast
By Kannaki Deka and Isabel Woodford
(Reuters) - Mexican cement producer Cemex SAB de CV on Thursday posted a near 2% fall in second-quarter earnings and lowered its full-year operating profit forecast, even as it boosted prices to offset surging energy costs.
The company, one of the largest concrete suppliers worldwide, reported a net profit of $265.3 million during the reported quarter, down from $269.9 million a year earlier.
It was able to mostly offset inflationary pressures with higher prices, posting a 6.8% rise in quarterly revenue to $4.08 billion, compared with $3.82 billion a year earlier.
Monterrey-based Cemex said in April it was implementing double-digit percentage increases in cement prices to maintain its margins, expecting energy prices to rise by around 35% this year.
"I am pleased that our pricing strategy is yielding results and has fully offset inflationary costs in the quarter," Chief Executive Fernando Gonzalez said in a statement on Thursday.
Still, it cut its projection for this year's earnings before interest, taxes, depreciation and amortization (EBITDA) to a low to mid-single-digit increase from a previous estimate of a mid-digit boost, according to a presentation accompanying its results.
Analysts from Actinver said the results were "mixed", and expected "a neutral impact on CEMEX’s share price".
Latin America's construction sector, heavily serviced by Cemex, saw demand drop in the first half of the year as inflationary pressures caused prices to skyrocket.
(Additoinal reporting by Valentine Hilaire; Editing by Shailesh Kuber and Jan Harvey)