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By Kylie Madry
MEXICO CITY (Reuters) - Mexico's Cemex posted a net profit in the fourth quarter on Thursday, as price hikes helped offset a drop in sales, while the cement maker also rolled out a savings program aimed at delivering a $350 million earnings boost by 2027.
Cemex's net profit in the quarter reached $48.31 million, but missed the estimate of $91.29 million from analysts polled by LSEG, as sales were down 5% year-on-year at $3.81 billion.
The cement and concrete maker's volumes were down in nearly all sectors, with Cemex citing lower demand in its key markets, Mexico and the United States.
Volumes in Mexico dropped following the country's mid-year elections, Cemex said. In the U.S., operations were hit by a series of hurricanes and a freeze in Texas, which dinged its core earnings by some $38 million, according to the company.
Cemex said it is optimistic about this year's volumes in the U.S. on infrastructure and manufacturing projects, while Mexico will likely continue to face headwinds in the first half.
In a statement accompanying its earnings report, Cemex announced the launch of a cost-cutting program designed to add $350 million to its core earnings by 2027.
The company plans to achieve this by streamlining operations, improving efficiency and leveraging digital technology, although it did not provide further details.
The program is expected to contribute $150 million to earnings this year, with further increases thereafter, while also delivering savings to the free cash flow line, according to the company.
Starting this year, Cemex will invest in "growth through small- to medium-sized acquisitions, primarily in the U.S., additional deleveraging and building further on (its) shareholder return programs," CEO Fernando Gonzalez said.
Cemex has exited a number of non-core businesses to shift its focus toward the U.S. market. Last year, it sold off its operations in the Philippines, Guatemala and the Dominican Republic.
(Reporting by Kylie Madry; Editing by Sherry Jacob-Phillips)