CHIHUAHUA, Mexico, July 24, 2018 (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 second quarter of 2018.
Sales increased 6.9% in 2Q18 and 11.4% in first six months
EBITDA rose 8.7% in quarter and 22.0% in first six months
EBITDA margin reached 29.9% in quarter and 28.8% in first six months of 2018, up 250 basis points
Sale of non-core ready-mix assets for US$ 118.5 million increases focus on integrated operations
Purchase of 315,000 mt cement plant in Montana for US$ 107.5 million increases capacity 11% and expands market area
All bank debt refinanced, saving US$ 10 million per year in interest expense
Net leverage (Net debt/EBITDA) ratio fell to 1.82 in June 2018
KEY FIGURES (millions of dollars)
| 2Q18 | 2Q17 | 2Q18 vs. 2Q17 | 1H18 | 1H17 | 1H18 vs. 1H17 | |||||||
| Net Sales | 232.3 | 217.2 | 6.9 | % | 398.8 | 358.0 | 11.4 | % | ||||
| Operating Income before other expenses | 50.4 | 44.2 | 14.2 | % | 76.4 | 54.9 | 39.0 | % | ||||
| EBITDA | 69.4 | 63.8 | 8.7 | % | 115.0 | 94.2 | 22.0 | % | ||||
| EBITDA margin | 29.9 | % | 29.4 | % | 28.8 | % | 26.3 | % | ||||
| Income from continuing operations | 28.2 | 21.4 | 32.1 | % | 40.0 | 22.0 | 81.8 | % | ||||
| Discontinued operations | (40.2 | ) | 0.9 | (40.6 | ) | 2.0 | ||||||
| Consolidated Net Income | (11.9 | ) | 22.2 | (0.6 | ) | 24.0 | ||||||
| Earnings per Share (US$) | (0.0360 | ) | 0.0670 | (0.0019 | ) | 0.0722 | ||||||
| EBITDA: operating income before other expenses + depreciation and amortization | ||||||||||||
GCC delivered growing sales and EBITDA and a higher EBITDA margin, with solid operating results in both the United States and Mexico. The Company completed the acquisition of a cement plant in Montana, increasing its U.S. production capacity 11%; sold non-core, ready-mix assets; and refinanced its bank debt, reducing interest expense significantly.
For the first six months of 2018, GCC increased sales 11.4% and generated US$ 115 million in EBITDA, with a margin of 28.8%. Income from continuing operations was US$ 40.0 million. Ready-mix assets sold in Oklahoma and Arkansas were reclassified as discontinued operations, and generated an accounting loss of $40.6 million, mostly for the difference between book value and sale price. This resulted in a small net loss for GCC for the first half of the year.
The Company refinanced all its bank debt with a new US$ 400 million, 5-year term loan agreement; the lower interest rate is expected to generate savings of approximately US$ 10 million per year. The banks are also providing a US$ 50 million unsecured, revolving line of credit.
S&P upgraded GCC’s debt rating to BB+, with a stable outlook.
GCC’s shares were also included in the MSCI indices effective June 1, 2018.
Enrique Escalante, GCC’s Chief Executive Officer, said, “GCC’s operating results continue the steady improvement in sales and margins that we’ve delivered since 2013. We also took a number of strategic actions that will help us achieve our long-term goals effectively.
“The new cement plant in Three Forks Montana extends our market footprint and integrates well with our existing cement network. The asset sale removes some non-core assets that were a drag on our performance. The debt refinancing significantly lowers financial costs and further strengthens our capital structure and leverage profile.
“Our first half operating performance and the M&A and financial transactions will help make 2018 another benchmark year in GCC’s transformation,” Escalante concluded.
REVISED OUTLOOK FOR 2018
| 2018 Outlook | Previous | Revised | |
| United States | |||
| Volumes | Cement | Low single digit increase | + 9 to 11% |
| Cement, like-to-like | + 2 to 4% | ||
| Ready-mix | + 1 to 3% | ||
| Prices (US$) | + 3 to 5% | + 3 to 5% | |
| Mexico | |||
| Volumes | Cement | = | + 1 to 3% |
| Ready-mix | = | = | |
| Prices (Ps.) | Cement | + 3 to 5% | + 5 to 7% |
| Ready-mix | + 3 to 5% | + 3 to 5% | |
| Consolidated | |||
| EBITDA | Mid-single digit increase | + 11 to 13% | |
| Working capital | Slight decrease | Slight increase | |
| Total CAPEX | US$ 120 million | ||
| Maintenance | 60 | ||
| Rapid City expansion | 60 | ||
| Net Debt/EBITDA, end -year | ≦ 2.0 | ≈ 1.5 | |
COMPLETE EARNINGS REPORTS
GCC’s complete earnings report is available on GCC’s Investor Relations page.
CONFERENCE CALL
Grupo Cementos de Chihuahua, S.A.B. de C.V. will host its earnings conference call on July 25, 2018.
Time: 11:00 am (Eastern Time) / 10:00 am (Mexico City) / 09:00 am (Mountain Time)
Conference ID: 7370181
Dial in:
U.S.: 1-888-254-3590 Toll Free
International: 1-323-994-2093
Replay (through August 1, 2018):
U.S.: 1-844-512-2921 Toll Free
International: 1-412-317-6671
Listen-only webcast and replay: click here.
About GCC
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 5.1 million metric tons. Founded in 1941, the Company’s shares are listed on the Mexican Stock Exchange under the ticker symbol GCC.
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 rmartinezg@gcc.com | Daniel Wilson, Zemi Communications +1 (212) 689 9560 dbmwilson@zemi.com |