RNS No 1773r
CEMEX S.A. DE C.V.
28th July 1997
Between the first and second quarters of 1997, net debt fell 2% as off-balance
sheet financings fell 9%, cash increased 19% and on-balance sheet debt increased
less than 1% in dollar terms.
Leverage (total debt / total capitalization) at the end of the quarter was
51.7%, lower than the 51.9% at June 1996 and lower than the 51.9% level at March
1997. The calculation of total debt includes balance sheet debt plus the SRUs
and the exchangeable note from the Dominican Republic financing.
Long-term: 84% or Ps. 31.524 billion (US$3.965 billion)
Short-term: 16% or Ps. 6.116 billion (US$769 million)
Denomination Dollars Pesetas Mex. Pesos Bolivares Col. Pesos
1997 92% 6% 0% 1% 1%
1996 84% 10% 3% 1% 1%
Average Cost Dollars Pesetas Mex Pesos Bolivares Col. Pesos
1997 8.2% 6.0% - 18.0% 28.1%
1996 8.2% 8.4% 33.0% 44.7% -
The only change in off-balance sheet transactions during the second quarter was
the amortization payment of the Valenciana equity swap. This payment was the
first of 6 originally scheduled amortization payments. At the end of the second
quarter 1997, off-balance sheet transactions totalled approximately US$558
million. It is expected that off-balance sheet financings should be at this
same level at year end as the equity swap with Societe Generate will be
refinanced in its original amount and other smaller items are retired at
maturity.
To actively manage interest rate and currency exposure arising from its ordinary
business, Cemex has entered into financial arrangements in the derivatives and
swaps markets. At the end of the second quarter these transactions had an
aggregate notional amount of US$500 million and involved interest rate swaps.
The mark-to-market value of these transactions at June 30 was a net amount of
approximately US$435 thousand in favor of Cemex.
Net Exchange Loss in the second quarter was Ps. 27 million versus Ps. 264
million a year earlier. A large portion of foreign exchange loss in the second
quarter of 1996 was due to the devaluation of the Venezuelan Bolivar. In the
second quarter of 1997, a loss of 0.03 pesos per dollar was realized. Foreign
exchange losses related to debt used to acquire assets outside of Mexico have
been charged to equity in accordance with international generally accepted
accounting principles. The impact of this charge to the equity account was more
than offset by the revaluation of Cemex's fixed assets that is required by
Mexican GAAP.
During the second quarter, the peso depreciated 2% (in peso terms) with respect
to the dollar, as measured by the interbank exchange rate. The depreciation for
Cemex totaled 0.4% as the company uses an average exchange rate based on the
following rates: (i) bank transfer, (ii) cash, and (iii) bank document.
Exchange rates used by the Company at June 30, 1996 and June 30, 1997 were
Ps. 7.58 and Ps. 7.95 per dollar, respectively.
A net monetary position gain of Ps. 1.023 billion was recognized during the
quarter, a decrease of 60% in real terms versus a year earlier due to the
implementation of a new subsidiary-weighted inflation conversion method which is
being implemented in Mexico in 1997. The weighted average factor used in the
second quarter of 1997 was 2.85%. By comparison, the factor used to calculate
the monetary position gain in the second quarter of 1996 was based on Mexican
inflation of 6.41%. (Please refer the Changes to Mexican Accounting Principles
section on page 10 of this report).
Other Expenses and Income were an expense of Ps. 198 million, a 49% decrease in
real terms over the second quarter of 1996 due to the cancellation of tax
provisions which were registered in 1996. Amortization of goodwill, anti-dumping
duties and a provision for severance payments comprise the majority of these
expenses. Actual cash expense was Ps. 122 million, Ps 40 million greater than
in the second quarter of 1996 due to additional severance payments made in the
Spanish operations.
The total effective tax rate was 12.3% in the quarter, comprised of ISR (9.5%)
and PTU (2.8%). The full amount represents a tax provision based on the expected
tax rate for 1997, and no cash taxes were paid during the quarter.
Minority Interest decreased 19% in the quarter in real terms. The decrease was
due to the repayment of the Citibank equity swap in May 1996, which was
colateralized with shares of Sunbelt Enterprises, Cemex's U.S. subsidiary. Of
the total registered in the income statement, 52% is directly related to the
Valenciana equity swap, which represents 35% of the total minority interest
registered in the balance sheet. The shares committed to this Transaction
represent 25% of the total capital of Valenciana, However, Cemex retains the
right to repurchase these shares at specified times and prices over the next two
years, and the economic rights to these shares are retained by Cemex for the
benefit of its majority shareholders. As such, beginning July 1 the income
related to these shares will not be registered as minority interest. Had this
change taken place in the second quarter, the impact would have been to reduce
minority interest, and increase majority net income, by Ps. 262 million (US$33
million).
The average number of shares outstanding during the period (not including
shares held in trust for equity swaps) was 1,241,338,137 (A shares: 508,255,187;
B shares: 392,194,024; CPO shares: 340,888,925). Transactions related to
shares that were put into trust for equity swaps comprised an aggregate of
23,606,558 Cemex CPO shares and 36,571,230 Cemex B shares.
Mexico (Constant Pesos)
In the following section we analyse the results of our businesses in Mexico on
a proforma basis, but only the operational aspects as a business unit rather
than an independent company. For this reason we won't analyze the remaining
items in the financial statements, and these figures are not included in the
tables.
Net sales during the second quarter were Ps. 3.304 billion, an increase of 11%
compared with the equivalent period in 1996 as volume increases more than offset
lower prices in constant peso terms. In dollar terms, net sales increased 27%
to US$416 million. The breakdown of total sales in Mexico during the second
quarter was as follows: 70% from domestic cement sales, 15% from ready-mix
sales, 9% from exports and 6% from tourism and others.
Cemex's domestic grey cement volume grew 34% in the second quarter of 1997
versus 1996, and the sales volume of ready-mix in Mexico increased 44%.
Volume increases year over year, in both cement and ready-mix, were driven by
the continuing recovery of the Mexican cement market and slight market share
gains in certain regions resulting from an increase in the number of points of
sale versus a year ago and other marketing initiatives. All sectors showed
important recovery with the notable exception of government public works
spending. The majority of this recent growth has come from private investment
in non-residential construction, although activity is picking-up in the social
housing sector as well. This demand is being driven by increased private
spending resulting from higher employment levels and the beginning of a recovery
in real wages. As for the formal sector, the strong ready-mix demand
experienced in the first half of the year is a clear sign of recovery.
Recent comments by government officials indicate that government spending will
increase in the second half of the year as the government has budgeted a fiscal
deficit of 0.5% of GDP for the full year, but has registered a surplus in the
first 6 months.
Cemex-Mexico's total export volume declined 12% during the quarter compared with
the second quarter of 1996 as exports to South East Asia declined substantially.
Exports during the quarter were distributed as follows:
The Far East: 42% Central and South America: 30% United States: 15%
The Caribbean: 11 % Africa: 2%
Cemex's average realized current price (invoice) in Mexico decreased 8% versus
the first quarter of 1997 and 17% from the second quarter of 1996 in constant
peso terms. Industry wide price discounts in the fourth quarter of 1996 and the
first 5 months of 1997 caused prices to fall during the period. Prices bottomed
out in May and increased 3% from May to June, in constant pesos, as the company
began reducing discounts. In dollar terms, prices fell 5% due to the industry
driven discounting during the quarter, but increased 4% in June.
The average ready-mix price decreased 8% in constant peso terms year over year
and increased 6% in dollar terms.
The average cash cost of cement production per ton decreased 11% in real terms
versus the second quarter of 1996 primarily due to lower fuel oil and labor
costs. Fuel oil costs decreased 11% in real terms when comparing the second
quarter of 1997 to that of 1996, while electricity costs increased 9% in the
same period. In the last two years, dollar-based fuel oil prices had adjusted
to international levels after the crisis but electricity prices have not fully
recovered to pre-crisis levels. Labor, the other important component decreased
23% in this time period. In dollar terms, costs increased 2% as variable cost
increases more than offset reductions in fixed costs per ton.
Gross margin decreased to 39.4% in the second quarter of 1997 from 42.5% in the
second quarter of 1996. This decrease was a result of the declining prices and
higher transportation costs.
Operating margin in Mexico decreased to 27.3% during the period from 28.4% in
1996. This decrease was due to the combination of lower gross margin
compensated by lower selling and administrative expenses. Operating income was
Ps. 903 million, 7% higher than in 1996.
Cash from operations (EBITD) in Mexico, after charges of Ps. 12.6 million
associated with operating leases, increased 5% to Ps. 1.178 billion in the
second quarter, due to the above mentioned factors. In dollar terms cash from
operations grew 21% to US$148 million. EBITID margin was 35.6% in the second
quarter versus 37.6% a year ago.
Spain (Pesetas)
For analysis purposes, Spanish results are presented in pesetas. When
consolidated into Cemex's results, these figure are converted into dollars and
then into pesos under Mexican GAAP.
The Spanish operations reported net sales of Ptas. 29.656 billion during the
second quarter, a 22% increase compared with the same period in 1996. This
increase was primarily due to substantial volume growth and the inclusion of
Cementos Especiales de las Islas, SA. Excluding Islas, sales grew 15%.
Domestic cement volume increased 21%, and ready-mix volume 26% during the
quarter due to a recovery in new housing starts that has been strong enough to
offset recent cuts in public works spending by the government. This strength in
housing construction is due to a general improvement in the Spanish economy,
particularly decreasing interest rates and increasing employment levels, and an
overall lack of new housing. This strength is confirmed by increasing prices in
the market. Non-residential construction is beginning to improve as well,
primarily in commercial centers and new office space. Additionally, imports
during the quarter fell 31% due to the weak peseta. These sales have been
replaced by Valenciana and other Spanish producers.
Exports increased 15% in the second quarter, distributed as follows:
United States: 62% Africa: 22% Europe & the Middle East: 16%
The average sales price for cement declined 3% in peseta terms, when compared
with the same period of the previous year, and decreased 15% in dollar terms due
to a devaluation of the peseta in the first quarter of 1997. The average price
for ready-mix during the period decreased 2% in peseta terms and 14% in dollar
terms.
The average cash cost of cement production per ton increased 7%, in peseta
terms, in the second quarter of 1997 versus 1996. Fuel costs increased 16% in
the period due in large part to the devaluation of the peseta against the dollar
during the first quarter of 1997 as fuel costs are based in dollars. This
increase was partially offset by a reduction in electricity costs. In addition,
the cost of raw material purchased from third parties increased 10%, while labor
costs were flat. In dollar terms the cash cost decreased 13%.
Gross margin decreased to 34.7% in the second quarter, from 37.9% in the
previous year primarily due to non-cash charges, including a 61% increase in
depreciation expense resulting from new fiscal accounting laws in Spain.
Selling and administrative expenses increased 14% in the quarter on an absolute
basis, due primarily to the increased depreciation, a non-cash item, and the
consolidation of Islas. SG&A expenses now represent 11% of sales versus 12%
in the second quarter of 1996.
Operating margin in the second quarter fell to 23.9% from 26.2% in 1996, due
mainly to the increase in depreciation. Operating income was Ptas, 7.073
billion, 11 % higher than in 1996.
Cash from operations (EBITD) increased 24% year over the year to Ptas. 10.598
billion. In dollar terms, cash from operations grew 8% to US$72 million. EBITD
margin was 35.7% in the second quarter versus 35.3% a year earlier.
The United States (Dollars)
For analysis purposes, Sunbelt Corporation's figures are presented in dollars.
In the consolidation process, Sunbelts figures are converted into pesos and to
Mexican GAAP.
Net sales in the United States during the second quarter increased 7% to US$111
million as higher ready-mix volumes and higher prices for cement offset slightly
lower cement volumes.
Cement sales volume decreased by 4% during the second quarter of 1997 as
compared to the same period in 1996. Second quarter volumes increased 27% over
a weak first quarter (due to rain and a loss of market share in Texas). Although
volumes are recovering, they have not yet reached the high levels of 1996 which
peaked in the second quarter. Lower imports from Mexico to Arizona in 1997 also
contributed to lower overall sales volumes.
Ready-mix volumes increased 2% during the quarter due to improved market share
in Arizona and an increased involvement in highway projects. Similarly,
aggregates volumes increased 3% in the same period.
Average realized cement prices increased 5% in the second quarter versus the
same period in 1996 as local cement producers are operating at capacity. Average
ready-market prices remained unchanged from a year ago, while the average price
of aggregates decreased 2%.
Cement and aggregate volumes and prices have been converted from short tons to
metric tons using 1.102311 short tons per metric ton, and ready-mix volumes from
cubic yards to cubic meters using 1.3079 cubic yards per cubic meter.
Gross margin decreased to 15.2% in the quarter from 17.9% in 1996, due to lower
cement volumes and the consolidation of a lower margin petcoke trading operation
beginning in the third quarter of 1996.
Operating margin decreased to 8.3% in the second quarter from 10.8% in 1996 as a
result of an increase in operating cost at the corporate level. The operating
margin for cement-related businesses on a stand-alone basis was 10.9% vs 12.8% a
year ago.
Operating income was 18% lower than the second quarter of 1996 and cash from
operations (EBITD), after charges of US$3 million associated with operating
leases, decreased 13% to US$13 million. Cash from operations grew 91% from the
US$7 million registered in the first quarter. EBITD margin was 12.2% in the
second quarter versus 14.8% a year ago.
Venezuela (Constant bolivares)
For analysis purposes, Venecemos' figures are presented in constant bolivares
considering Venezuelan inflation. When consolidated into Cemex's results, these
figures are converted into dollars and then into pesos and Mexican GAAP.
During the second quarter of 1997, net sales in Venezuela were Bs. 51.868
billion, a 5% increase in constant bolivar terms over the same period in 1996.
This was primarily the result of an 19% increase in domestic volumes (cement
and others) and 46% growth in ready-mix volumes. In dollar terms, net sales
increased 45% to US$106 million due to the improved volume and very strong
dollar prices resulting from the stable bolivar.
Cement demand has been increasing across all sectors recently due to the
improved economic situation, and increased confidence by foreign investors in
the governments commitment to continued economic reforms and privatizations.
Resulting from the ongoing privatization of the oil industry, significant
private investment has been flowing into the country in order to modernize the
sector. Housing construction is recovering quickly due to the governments
recent reforms of labor laws and recent growth in wage levels. In addition, a
new government guarantee placed on mortgage lending has had the effect of
significantly increasing the availability of mortgage financing. Public works
spending is also growing, and while there are currently few projects they are of
substantial size.
The volume of exports from Venezuela were flat in the quarter and comprised 50%
of total sales volumes versus 54% a year ago. Exports during the quarter were
distributed as follows:
United States: 52% The Caribbean & Central America: 24%
South America: 22% Africa: 2%
Cement prices were flat and ready-mix prices decreased 1%, in constant bolivar
terms, when compared with the second quarter of 1996 as inflation in the last
twelve months was approximately 43%. In dollar terms, cement prices increased
49% while ready-mix prices increased 46%, as the boilvar was relatively
unchanged between June 1996 and June 1997.
The average cash cost of cement production per ton increased 20% in constant
bolivar terms in the second quarter of 1997 compared to the second quarter of
1996, as a 2% reduction in fixed costs was offset by a 46% increase in variable
costs due primarily to an increase in the cost of purchased raw materials and
their transportation. Labor costs remained relatively unchanged. In dollars,
the cash cost per ton increased 63%.
Gross margin decreased to 43.8% in the second quarter from 50.8% in 1996 due to
a 20% increase in the cost of goods sold while prices remained flat.
Selling and administrative expenses decreased 27% in the quarter, and now
represent 7% of sales versus 10% in 1996.
As a result of the decline in gross margin, operating margin decreased to 36.7%
in the second quarter from 40.7% in the prior year, on operating income of
Bs. 19.059 billion, 5% lower in real terms than a year ago.
Cash from operations (EBITD), after charges of Bs. 1.450 billion associated with
cost restatements for inflation, was Bs. 23.598 billion for the quarter, an 8%
decrease over the same period in 1996. In dollar terms, operating cash flow
increased 27% to US$48 million. The EBITO margin was 45.5% in the second
quarter of this year versus 52.0% in 1996.
Columbia (Columbian pesos)
For analysus puroposes, Diamante's figures are presented in constant Columbian
pesos. When consolidated into Cemex's results, these figures are converted into
dollars and then into Mexican pesos and Mexican GAAP.
Note: The results of Cemex's Columbian operations in 1996 included only
Cementos Diamante for the months of May and June. In the second quarter of 1997
the Colombian subsidiary includes Diamante and Samper for the full three
months. In this analysis, for comparison purposes only, we are presenting a
proforma Diamante (which includes Diamante and Samper) for the full second
quarter of 1996.
Net sales in Cementos Diamante, in constant colombian pesos, were CPs. 108.3
billion (US$99 million), slightly higher than the CPs. 108.2 billion proforma
net sales from the second quarter of 1996. Sales were relatively unchanged as
increased prices offset lower volume. Second quarter net sales increased 6% over
the first quarter due to improving volumes in both cement and ready-mix.
The cement industry in Colombia continues to be affected by the current
recession of the economy, and as a result industry demand fell by 3% versus the
second quarter of 1996. The trend, however, is starting to improve as the
industry grew 3% compared to the first quarter of this year.
Gross margin was 35.5% for the quarter versus 29.9% in the second quarter 1996.
Selling and administrative expenses declined 20% from the second quarter of
1996, and now represent 12% of sales versus 15% in the year ago period. These
expenses should decline further in coming quarters as savings are realized from
continued integration and optimization of the operations.
Operating margin was 23.1% in the quarter on operating income of CPs. 25.030
billion (US$23 million) This compares to an operating margin of 14.5% and
operating income of CPs. 15.720 billion, in constant terms, in the second
quarter of 1996 (proforma).
Cash from operations (EBITD), after charges of CPs. 1.159 billion associated
with operating leases, was CPS. 38.390 billion (US$35 million) in the quarter,
with a margin of 35.5%.
The Dominican Republic and Panama
Net sales in the Dominican Republic were US$32 million in the second quarter, up
33% year over year.
The operating margin in the Dominican Republic was 37% with operating income of
US$12 million. The operating cash flow was US$13 million, an increase of 52%.
EBITD margin was 40%, up from 35% in the same period a year ago.
Net sales in Panama were US$16 million in the quarter, 60% higher than the
second quarter of 1996.
The operating margin in Panama was 33%, versus 20% a year ago, on operating
income of US$5 million. The operating cash flow was US$8 million with a margin
of 51%.
Financing Activities and Strategy
The following is a summary of the transactions carried out during the second
quarter.
Committed Revolving Credit Facility
In May, Cemex closed a three-year, US$600 million Committed Revolving Credit
Facility which effectively eliminates refinancing risk for the next 6 to 9
months. The facility has a commitment period of one year, and may be renewable
at market conditions and each lender's option for another year. Any funds drawn
by Cemex under this facility may be converted to a term loan with a final
maturity of May 2000.
The facility will only be available for Cemex to refinance maturing debt and
should provide the flexibility to access the international capital markets in an
orderly fashion despite temporary market disruptions. In addition to addressing
the short-term nature of the liability structure, the incurrence test accepted
by Cemex reinforces our commitment to reducing the risk of the capital
structure, as well as confidence in the expected improvement in interest
coverage during 1997 and 1998.
The terms and conditions are as follows: Total debt, including off-balance sheet
transactions, must not be greater than US$5.4 billion on a proforma basis unless
Cemex can demonstrate that for each dollar of incremental debt there is US$1.5
of incremental equity; interest coverage must be greater than 1.6 times through
June 1997, and greater than 1.75 times from July through December 1997, and
greater than 2.00 times in 1 998; the commitment fee is 37.5 basis points per
year over the undrawn amount, and if the funds are drawn the cost is LIBOR plus
125 basis points during the commitment period.
As a result of having this program in place we have already experienced tighter
spreads on commercial paper issuances and in the annual renegotiation of the US
Commercial Paper program.
Amortization of Spanish Syndicated Loan
In June, Cemex-Spain amortized approximately US$54 million of the Ptas. 108.375
billion (US$835 million) syndicated loan, which was entered into in December of
1996. This is the first of 14 semi-annual amortization payments called for over
the life of the loan.
Breakdown of Share Transactions
The average shares outstanding for the second quarter of 1997 were derived as
follows:
Average total shares subscribed and paid for the
second quarter of 1997 1,415,951,039
(including an average reduction of 1,085,677 shares
purchased under the Share Repurchase Program during the
quarter)
less: Average number of shares held by Cemex subsidiaries (114,435,024)
less: Average number of shares held in trust for equity swaps (60,177,788)
--------------
Average total shares outstanding for the second quarter
of 1997 1,241,338,227
==============
The change in the number of shares outstanding during the
second quarter of 1997 is explained as follows:
Number of shares outstanding as of March 31, 1997 1,245,514,925
Change in the number of total shares subscribed and paid
between period resulting from the exercise of stock options
(not including Share Repurchase Program activity) 118,632
Share Repurchase Program activity (June 1 - June 30) (3,257,000)
Cemex operations at subsidiaries: Sales (purchases)
(April 1-May 31) (3,499,094)
Number of shares outstanding as of June 30, 1997 1,238,877,463
Share Repurchase Program
At the 1996 annual shareholder's meeting held on April 24, 1997, shareholders
approved a program to repurchase shares. On March 30, Cemex's Board of Directors
approved a repurchase with a minimum amount of Ps.920 million (US$115) and
maximum of up to Ps 1.6 billion (US$200 million). The purchases will occur from
time to time in the open market, and/or in privately negotiated transactions as
market conditions warrant. Any purchase would depend on price, market conditions
and other factors. The Company will fund the share repurchase program with
internally-generated funds from existing operations.
The company begun repurchasing shares on June 1, 1997, and for the second
quarter, 3,207,000 Cemex A shares were repurchased at an average price of ps
31.75 per share and 50,000 Cemex B shares were repurchased at an average price
of Ps 32.50 per share. In addition, the purchase of 8,904,090 Cemex B shares, at
Ps 37.59 per share, has been guaranteed through the use of forward contracts.
The repurchase program will continue until May 31, 1998.
Employee Stock Options
In 1995, the Company adopted a stock option plan under which the Company is
authorized to grant, to directors, officers and other employees, options to
acquire up to 72,100,000 Cemex B shares. As of June 30, 1997 options to acquire
a total of 13,823,255 Cemex B shares had been granted as follows: 5,345,789
granted in 1995 with an exercise price of Ps. 20.00 per share; and 8,477,466
granted in 1996 with an exercise price of Ps 29.60 per share. Each of the
outstanding options vests at a rate of 25% per year on each of the first four
anniversaries of the date of its grant and expires on the tenth anniversary of
such date or when the employee ceases to be employed by Cemex. Under this type
of program, the company is not required to register a liability for the options.
Changes to Mexican Accounting Principles.
Beginning January 1, 1997, the following changes were adopted in the
consolidated financial information of Cemex:
In 1997, the restatement of the consolidated financial statements from the prior
period to "real terms" will be calculated using a weighted average of the
inflation from each country in which we operate and the change in exchange rate
of each country, in place of using an inflation factor based only on Mexican
inflation. The June 1996 to June 1997 inflation factor based on inflation in
Mexico is 1.2028, while the weighted average factor used by Cemex in the
consolidated financial statements is 1.1417.
In the same manner, the calculation of consolidated Monetary Position Gain or
Loss will be determined using the inflation from the country of origin for each
of the operations of the Cemex group (in accordance with bulletin B-15, which is
expected to be implemented during this year, retroactive to January 1, 1997);
though 1996 Mexican inflation was used in this calculation (in accordance with
bulletin B-10). In the second quarter of 1997, inflation in Mexico was 2.92%
while the weighted average used by Cemex was 2.85%. The effect of this change in
methodology during the second quarter of 1997 is a reduction in the Monetary
Position Gain of $25 million pesos.
With the implementation of the Fifth Amendment to Bulletin B-10 (5o Documento de
Adecuaciones al Boletin B-10) the practice of using independent appraisers to
determine the factor by which fixed assets are to be revalued has been
eliminated, and the revaluation of the assets in each country of operation will
be calculated according to the inflation in the assets country of origin and
converted using the end of period exchange rate.
At June 30, 1997, Mexico represented 43.05% of the total assets, Spain 26.12%,
Columbia 12.20% Venezuela 10.12%, the United States, 5.19%, and the Caribbean
and Panama 3.32%.
Management Changes
As a result of a complete analysis of the structure and organization of the
Mexican operations by new Cemex-Mexico president Francisco Garza, several new
programs have been implemented and some changes to the management team were made
in June. Most notable among the changes in management was the naming of Juan
Romero, previously President of Cemex-Columbia, as Commercial Director of
Cemex-Mexico. Replacing Mr. Romero as President of Cemex-Columbia, as commercial
Director of Cemex-Mexico. Replacing Mr. Romero as President of Semex-Columbia is
Hector Valenzuela, who was previously Concrete Director of Cemex-Mexico. Cesar
Constain, previously Concrete Director of Cemex-Columbia, was named as new
Concrete Director of Cemex-Mexico.
CEMEX, S.A. DE C.V. AND SUBSIDIARIES
Consolidated Figures
(Convenience translation in thousands of dollars)
January-June
INCOME STATEMENT 1997 1996
Net Sales 1,740,734 1,531,738
Cost of Sales (1,068,610) (928,355)
Gross Profit 672,125 605,383
Selling, General and Administrative Expenses (262,971) (224,486)
Operating Income 409,154 380,897
Financial Expenses (251,798) (304,285)
Financial Income 15,435 26,662
Exchange Gain (Loss), Net (6,215) (53,520)
Monetary Position Gain (Loss) 310,016 661,861
Total Comprehensive Financing (Cost) Income 67,438 330,717
Gain or (Loss) on Marketable
Securities 13,538 20,699
Other Expenses, net (60,723) (66,500)
Other Income (Expense) (47,185) (45,800)
Net Income Before Income Taxes 429,407 665,814
Income Tax (39,757) (34,829)
Employee's Statutory Profit Sharing (8,103) (9,713)
Total Income Tax & Profit Sharing (47,859) (44,342)
Net Income before Participation of
Uncons, Subs, and Ext. Items 381,547 621,472
Participation of Unconsolidated
Subsidiaries 8,429 10,619
Consolidated net Income 387,976 632,091
Net Income Attributable to Min. Interest 62,292 73,857
NET INCOME AFTER MINORITY INTEREST 325,685 558,435
EBITD (Op. Inc + Depreciation) 552,874 517,966
QUARTERS
INCOME STATEMENT 1997 1996
Net Sales 945,012 772,306
Cost of Sales (579,068) (465,822)
Gross Profit 365,943 306,484
Selling, General and Administrative Expenses (140,074) (116,782)
Operating Income 225,870 189,701
Financial Expenses (124,775) (147,828)
Financial Income 6,945 12,828
Exchange Gain (Loss), Net (3,434) (30,449)
Monetary Position Gain (Loss) 128,730 297,661
Total Comprehensive Financing (Cost) Income 7,466 132,212
Gain or (Loss) on Marketable
Securities 4,772 962
Other Expenses, net (24,882) (36,915)
Other Income (Expense) (20,090) (35,953)
Net Income Before Income Taxes 213,246 285,960
Income Tax (20,260) (26,241)
Employee's Statutory Profit Sharing (5,867) (4,992)
Total Income Tax & Profit Sharing (26,128) (31,233)
Net Income before Participation of
Uncons, Subs, and Ext. Items 187,118 254,727
Participation of Unconsolidated
Subsidiaries 2,319 5,696
Consolidated net Income 189,438 260,423
Net Income Attributable to Min. Interest 35,014 39,586
NET INCOME AFTER MINORITY INTEREST 154,424 220,837
EBITD (Op. Inc + Depreciation) 303,002 256,585
BALANCE SHEET
January-June
1997 199
Total Assets 10,157,641 9,160,524
Cash and Temporary Investments 394,218 370,483
Trade Accounts Receivables 472,838 435,728
Other Receivables 159,227 190,837
Inventories 436,178 397,741
Other Current Assets 146,332 102,738
Current Assets 1,608,789 1,497,527
Fixed Assets 5,915,551 5,440,078
Other Assets 2,633,300 2,222,919
Total Liabilities 5,613,091 5,099,744
Current Liabilities 1,303,027 1,570,799
Long-Term Liabilities 3,965,280 3,234,694
Other Liabilities 344,784 294,251
Consolidated Stockholders' Equity 4,544,549 4,060,781
Stockholders' Equity Atributable
to Minority Interest 1,106,883 948,434
Stockholders' Equity Attributable
to Majority Interest 3,437,687 3,114,347
CEMEX S.A DE C.V. AND SUBSIDIARIES
CONSOLIDATED FIGURES
(Thousands of Pesons in Real Terms as of Jun. 1997)(")
January - June Quarters
INCOME STATEMENT 1997 1996 II 1997 II 1996
Net Sales 13,838,837 13,255,795 7,512,843 6,683,600
Cost of Sales (8,495,447) (8,016,755) (4,603,593) (4,031,263)
--------------------------------------------------------------------------------
Gross Profit 5,343,390 5,239,040 2,909,250 2,652,337
Selling, General and
Administrative Expenses (2,090,617) (1,942,721) (1,113,585) (1,010,644)
--------------------------------------------------------------------------------
Operating Income 3,252,774 3,296,319 1,795,665 1,641,693
Financial Expenses (2,001,795) (2,633,312) (991,960) (1,279,319)
Financial Income 122,706 230,733 55,211 111,013
Exchange Gain (Loss), Net (49,409) (463,171) (27,298) (262,505)
Monetary Position Gan (Loss) 2,464,626 5,727,799 1,023,402 2,575,982
Total Comprehensive Financing
(Cost) Income 536,128 2,862,050 59,355 1,144,172
Gain or (Loss) on Marketable
Securities 107,627 179,135 37,939 8,321
Other Expenses, Net (482,746) (575,493) (197,654) (319,454)
Other Income (Expense) (375,119) (396,358) (159,716) (311,142)
--------------------------------------------------------------------------------
Net Income Before Income
Taxes 3,413,783 5,762,010 1,895,304 2,474,722
Income Tax (316,065) (299,681) (161,088) (227,090)
Employees' Statutory Profit
Sharing (64,417) (84,055) (46,646) (43,202)
Total Income Tax & Profit
Sharing (380,482) (383,737) (207,714) (270,292)
--------------------------------------------------------------------------------
Net Income Before Participation
of Uncons. Subs. and Ext.
Items 3,033,301 5,378,274 1,487,590 2,202,430
Participation in Unconsoli-
dated Subsidiaries 51,109 91,900 18,439 49,296
Consolidated Net Income 3,084,410 5,470,174 1,506,029 2,253,726
Net Income Attributable to
Min. interest 495,218 637,431 278,358 342,583
NET INCOME AFTER MINORITY
INTEREST 4,395,347 4,482,521 2,406,857 2,220,513
--------------------------------------------------------------------------------
January - June
BALANCE SHEET 1997 1996
--------------------------------------------------------------------------------
Total Assets 80,753,242 79,275,965
Cash and Temporary Invest-
ments 3,134,018 3,206,168
Trade Accounts Receivables 3,759,044 3,770,828
Other Receivables 1,265,857 1,651,518
Inventories 3,467,613 3,442,087
Other Current Assets 1,163,340 889,103
Current Assets 12,789,872 12,959,725
Fixed Assets 47,028,632 47,078,904
Other Assets 20,934,738 19,237,336
--------------------------------------------------------------------------------
Total Liabilities 44,624,074 44,133,620
Current Liabilities 10,359,065 13,593,827
Long-Term Liabilities 31,523,973 27,993,318
Other Liabilities 2,741,036 2,546,474
--------------------------------------------------------------------------------
Consolidated Stockholders'
Equity 36,129,168 35,142,345
Stockholders' Equity
Attributable in Minority
interest 8,799,557 8,190,519
Stockholders' Equity
Attributable to Majority
interest 27,329,611 26,951,825
--------------------------------------------------------------------------------
END
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