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(Bloomberg) -- Cemex SAB shares climbed after the Mexican company said it sees cement demand improving this year in the US, its largest market, after lower volumes dented sales for 2024.
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Annual net sales dipped 1% on a like-for-like basis to $16.2 billion, as higher prices failed to offset smaller volumes, Cemex said Thursday.
Four major hurricanes and a deep freeze in Texas hurt its US business last year, but the company expects a boost in 2025 from transportation projects under former President Joe Biden’s $1.2 trillion Infrastructure Investment and Jobs Act and from more manufacturing projects.
Cemex’s US-listed shares rose as much as 8.7% in New York after the earnings report, hitting their highest intraday value since September.
One of the world’s biggest cement makers, Cemex is grappling with weaker global demand as well as political uncertainty in its key markets of the US and Mexico. The company has been increasing prices and selling off non-core assets as part of its cost-cutting efforts. Cemex received $2.2 billion in the sale of non-core assets in emerging markets last year, the company said.
Like-for-like sales in the fourth quarter were flat from a year earlier at $3.81 billion, slightly below expectations. Operating earnings before interest, taxes, depreciation and amortization rose 3% on a like-for-like basis to $681 million, just ahead of analyst estimates.
Cemex also announced a three-year plan to reduce costs by $350 million by 2027. Dubbed “Project Cutting Edge,” it is expected to boost earnings by $150 million this year.
The Mexican cement maker could be affected by US President Donald Trump’s threat of tariffs on Mexican goods and the resulting foreign exchange volatility because much of its debt is in dollars. But it’s shielded from some of this risk due to its extensive US presence.
A currency hedging program helped reduce the impact of the strong dollar, which fully covers operating cash flow from operations in pesos, Cemex Chief Financial Office Maher Al-Haffar said on a conference call Thursday after the earnings release. The company also benefited from lower energy costs.
The new cost-cutting plan “should help to reduce the impact of US tariffs,” RBC analyst Anthony Codling said in a note, but he cautioned that the company “remains a passenger and its results will be impacted by the actions of others.”