(Bloomberg) -- Mexican cement maker Cemex SAB said rising costs in energy and imports in the U.S. as well as inflation in Europe pressured the company's margins in the third quarter. The company reported an unexpected net loss of $376 million due to an impairment charge of $500 million.
In Mexico, cement volumes fell 3% from the previous year due to bad weather, the largest cement maker in the Americas said in its quarterly report Thursday. Sales of other products in its home market accelerated in line with the recovery of the formal economy, Cemex said.
In Europe, the company saw tight capacity utilization and a sudden run-up in input cost inflation, leading Cemex to implement a second price increase during the quarter. Volumes were up 4% led by double-digit growth in the U.K. and Poland.
Cemex sees a 14% increase in energy costs for the remainder of the year. Earlier this month, Chief Executive Fernando Gonzalez said supply-chain issues would represent delays in execution of new projects and a potential impact of $100 million in Ebitda this year.
“We believe some of these cost headwinds such as shipping and fuel shortages are transitory in nature, but we are moving quickly to adjust pricing,” Gonzalez said in a call Thursday to discuss quarterly results. “You should expect continued rapid pricing adjustments to recover input cost inflation.”
Shares fell 2.96% to 13.45 pesos at 10 a.m. in Mexico City. The drop was the sharpest in the country's benchmark IPC index.
KEY INSIGHTS:
- Earnings before interest, taxes, depreciation and amortization reached $740 million. Analysts estimated $804 million.
- Sales reached $3.77 billion, below analyst's expectations of $3.88 billion.
- Leverage now stands at 2.74 times net debt to Ebitda.
- Cemex in process of closing $3.25 billion bank refinancing with improved terms and conditions.
- Average life of debt at 6.4 years.
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