GCC Reports Second Quarter and Six Month 2019 Results

CHIHUAHUA, Mexico, July 24, 2019 (GLOBE NEWSWIRE) -- Grupo Cementos de Chihuahua, S.A.B. de C.V. (BMV: GCC*), a leading producer of cement and concrete in the United States and Mexico, today announced its results for the second quarter 2019.

2Q19 HIGHLIGHTS

• Unusually heavy precipitation and colder-than-average temperatures adversely impacted most markets in the U.S. and disrupted GCC's distribution network  
• Consolidated Net Sales increased 3.5% to US$240.5 million in 2Q19, mainly driven by higher cement volumes and improved pricing in both countries
• Net sales rose 8.4% in Mexico and 1.8% in the U.S. due to volume and price increases
• EBITDA increased 2.2%, to US$ 70.9 million with a 29.5% EBITDA margin
• Excluding the effect of IFRS-16, EBITDA would have decreased 5.7% on a pro forma basis
• Net leverage (Net debt/EBITDA) ratio was 1.86x as of June 2019
• Earnings per share totaled US$ 0.0754
• A dividend of Ps. 0.8189 per outstanding share will be paid on August 15, 2019
• Rapid City stabilization process has improved significantly, reaching production levels to successfully meet FY 2019 demand
• A new terminal was opened in Fort Stockton, Texas
• All GCC businesses have a strong backlog

KEY FIGURES (millions of dollars)

* 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

Enrique Escalante, GCC’s Chief Executive Officer, commented: “While GCC’s U.S. operations continued to be adversely impacted during the second quarter by an above-average precipitation and below-average temperatures and construction labor shortages, the substantial backlog at our U.S. operations underscores strong demand for our products. We’ve begun to reap the benefits early in the third quarter, as the U.S. weather has finally cleared.

This quarter, we successfully leveraged GCC’s newest acquisition - our Trident plant in Montana - to serve our Canadian customers, while addressing the robust demand we’re seeing in both Montana and Idaho. As part of our original strategy, we continue looking for the best sales mix in order to optimize our profitability in this region.

I’m pleased to note that the stabilization process at our Rapid City, South Dakota, cement plant improved significantly during the second quarter, reaching current production levels that will now enable us to successfully meet our 2019 full year demand.

Further, despite prior oil well cement testing and approval process delays at our Chihuahua plant, we began shipment of oil well cement to GCC’s new Fort Stockton, Texas terminal which today is fully operational. This will increase our exported volumes; attracting additional customers to the region while improving product availability to current ones. 

Pricing dynamics in the U.S. continue to be favorable, the additional eight U.S. dollar per ton increase is in place since April 1 in all our markets excluding the oil well cement segment. While we have experienced some pushback, we have achieved an average of five U.S. dollar per ton increase.

Second quarter sales in Mexico increased by 8.4%, and by 8.2% for the first half of the year, despite a challenging environment, due to continued strength in pricing and volumes, which were again supported by the mining and construction sectors.”

Mr. Escalante continued, “We remain focused on containing expenses ahead of strong anticipated demand in the second half. And while we’re cautiously optimistic that our performance will strengthen in the coming semester, we have revised certain areas of our guidance based on our results thus far.”

He added, “Further, we continued our progress during the quarter securing long-term supply from a power generator, while we identify opportunities to tap renewable energy as part of GCC’s ongoing commitment to the environment and sustainability. Along these lines, in April we released GCC’s 2018 Sustainability Report which details the many aspects of our Company’s efforts in this area, as we build a more sustainable company and a more sustainable Earth."

EARNINGS REPORT

GCC’s second quarter 2019 earnings report is available at www.gcc.com, on the Investor Relations section.

CONFERENCE CALL

Grupo Cementos de Chihuahua, S.A.B. de C.V. will host its earnings conference call on July 24, 2019. 

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

Conference ID: 1757641

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 5.8 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.

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