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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report: May 13, 2005
CEMEX, S.A. de C.V.
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(Exact name of Registrant as specified in its charter)
CEMEX Corp.
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(Translation of Registrant's name into English)
United Mexican States
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(Jurisdiction of incorporation or organization)
Av. Ricardo Margain Zozaya #325, Colonia Valle del Campestre
Garza Garcia, Nuevo Leon, Mexico 66265
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b):
N/A
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CONTENTS
1. Press release announcing CEMEX's results for the first quarter of 2005
(attached hereto as exhibit 1).
2. 2005 first quarter earnings release (attached hereto as exhibit 2).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
CEMEX, S.A. de C.V. has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
CEMEX, S.A. de C.V.
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(Registrant)
Date: May 12, 2005 By: /s/ Rafael Garza
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Name: Rafael Garza
Title: Chief Comptroller
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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1. Press release announcing CEMEX's results for the first quarter of 2005.
2. 2005 first quarter earnings release.
Exhibit 1
Media Relations Investor Relations Analyst Relations
Jorge Perez Abraham Rodriguez Ricardo Sales
(52 81) 8888-4334 (52 81) 8888-4262 (212) 317-6008
CEMEX's First Quarter 2005 Sales Increase 43%;
Operating Income Grows 12%
MONTERREY, MEXICO, April 22, 2005 -CEMEX, S.A. de C.V. (NYSE: CX) announced
today that its consolidated net sales for the first quarter of 2005 were US$2.6
billion, 43% higher than in the same period of 2004.
Consolidated results for first quarter 2005 include one-month results of RMC
ending March 31, 2005. Results for first quarter 2004 do not include results of
RMC.
Excluding the effect of the consolidation of RMC, net sales grew 8% to US$1,956
million. During the quarter, all of our pre-RMC markets experienced increased
sales, with the exception of Mexico.
Consolidated cement and ready mix volumes continue to increase throughout most
of our markets, fueled mainly by infrastructure spending and residential
building. Our consolidated cement volume increased 5% while consolidated
ready-mix volume grew 74% in the first quarter to 16 million metric tons and
9.8 million cubic meters, respectively. Our consolidated aggregates volume
increased 130% in first quarter 2005, reaching 19.9 million metric tons.
Free cash flow for the quarter increased 2% versus the same quarter a year ago,
reaching US$296 million. EBITDA (operating income plus depreciation and
amortization) grew 14% to US$633 million. Excluding the effect of the
consolidation of RMC, EBITDA for the quarter was US$583 million, 5% higher than
a year ago.
Operating income for the quarter was US$440 million, up 12% over the same
period of 2004. Excluding the effect of RMC, operating income grew 6% to US$417
million. This improvement resulted primarily from higher domestic cement
volumes in most of the markets in our portfolio, despite fewer business days in
the quarter. Additionally our results benefited from continuing attractive
supply-demand dynamics.
Hector Medina, Executive Vice President of Planning and Finance, said: "This
was a very important quarter for the development of CEMEX. On March 1, we took
a significant strategic step by completing the acquisition of RMC. This
acquisition, and its integration into CEMEX, will provide us with greater
global
reach and stronger positions across the value chain, both of which will enable
us to compete more effectively and will enhance our financial strength to
continue to grow profitably throughout the business cycle".
"The integration process is moving smoothly and all operating teams are
demonstrating full commitment towards the deployment of the CEMEX business
model throughout the organization. We strongly believe that the implementation
of the CEMEX business model will improve the effectiveness and the turnaround
time required to complete the integration process".
Excluding the effect of consolidation of RMC, selling, general, and
administrative expenses (SG&A) as percentage of net sales increased 0.26
percentage points versus first quarter of 2004. Higher worldwide energy costs
have increased transportation costs throughout our markets.
Majority net income rose 43% in the first quarter of 2005, reaching US$444
million versus US$311 million a year ago. Excluding the effect of the
consolidation of RMC, majority net income grew 35% to US$421 million. This
increase is due to strong consolidated operating performance and to gains
resulting from our derivative positions.
Net debt at the end of the quarter was US$10,435 million, 87% higher than that
at the end of 2004. The increase in net debt reflects the acquisition of the
remaining share capital of RMC- executed in March 2005 - and the assumption of
RMC's debt on the acquisition day. The net-debt-to-EBITDA ratio increased to
3.2 times from 2.2 times at the end of 2004, while interest coverage remained
unchanged at 6.8 times versus the previous quarter.
On March 31, 2005, CEMEX announced that it completed the sale of certain CEMEX
assets in the Great Lakes region of the U.S. to Votorantim Participacoes S.A.
Votorantim acquired the Charlevoix and Dixon-Marquette cement plants.
The following summary of our results in our major markets do not include the
effect of the consolidation of RMC for first quarter 2005.
Our Mexican operations reported net sales of US$682 million, 2% lower than in
the first quarter 2004, and EBITDA of US$280 million, an decrease of 11%.
Domestic cement sales volumes for the quarter decreased 7%, while ready-mix
volumes grew 12%. Cement demand was affected by adverse weather - particularly
during the first two months of the year - and fewer business days as a result
of the earlier occurrence of religious holidays, which last year took place
during the second quarter. Adjusting for the fewer business days this quarter,
cement volumes would have decreased 2% versus first quarter 2004. The main
driver of cement demand in Mexico during the first quarter was the residential
sector.
In The United States, net sales for the quarter were US$491 million, 22%
higher, while EBITDA reached US$107 million, an increase of 44%. Domestic
cement volume remained flat, while ready-mix sales volumes for the quarter
increased 6%. Construction activity remains strong, with month-over-month
increases in construction spending since May 2003. Cement and ready-mix sales
continue to be driven by increased spending in infrastructure - particularly in
streets and highways - and residential construction. However, unfavorable
weather conditions during the quarter, especially in the western United States,
have affected cement demand.
Our operations in Spain reported net sales of US$335 million in the first
quarter of 2005, up 15% from the year-earlier period. EBITDA reached US$112
million, representing an increase of 23%. Domestic cement sales volumes grew 4%
while ready-mix volumes increased 5%, compared to the same quarter of 2004. The
residential sector continues as one of the main drivers of demand, with
increased housing starts. Public-works spending is also growing and represents
an important component of cement consumption; the sector's primary catalyst
continues to be Spain's infrastructure plan.
CEMEX is a growing global building solutions company that provides products of
consistently high quality and reliable service to customers and communities in
more than 50 countries throughout the world. The company improves the
well-being of those it serves through its relentless focus on continuous
improvement and efforts to promote a sustainable future. For more information,
visit www.cemex.com.
----------------------------------------------------
Exhibit 2
CEMEX 2005
[logo omitted] FIRST QUARTER RESULTS
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Stock Listing Information
NYSE (ADR)
MEXICAN STOCK EXCHANEG
Ticker: CEMEX.CPO
Ration of CEMEX.CPO to CX = 5:1
Investor Relations
In the United STATES
1 877 7CX NYSE
In Mexico
52 (81) 8888-4292
E-mail
ir@cemex.com
www.cemex.com
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First quarter (1) First quarter (1)
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2005 2004 % Var. 2005 2004
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Net sales 2,585 1,809 43% % of Net Sales
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Gross profit 1,047 776 35% 40.5% 42.9%
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Operating income 440 393 12% 17.0% 21.7%
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Majority net income 444 311 43% 17.2% 17.2%
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EBITDA 633 557 14% 24.5% 30.8%
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Free cash flow 296 289 2% 11.4% 16.0%
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Net debt 10,435 5,352 95%
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Net debt/EBITDA 3.2 2.4
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Interest coverage 6.8 5.7
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Quarterly earnings per ADR 1.31 0.96 36%
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Average ADRs outstanding 339.6 324.2 5%
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In millions of US dollars, except ratios and per-ADR amounts. Average ADRs
outstanding are presented in millions of ADRs.
Consolidated net sales grew to US$2,585 million, representing an increase of
43% over those of first quarter 2004. Excluding the effect of the
consolidation of RMC Group p.l.c. ("RMC"), net sales grew 8% to US$1,956
million. During the quarter all our pre-RMC markets experienced increased
sales, with the exception of Mexico, which declined 2%. Cement and ready-mix
volumes continue to increase throughout most of our markets, fueled mainly by
infrastructure spending and residential building.
Cost of goods sold, excluding the effect of the consolidation of RMC,
increased 0.14 percentage points as a percentage of net sales versus first
quarter 2004. This increase is due mainly to higher average energy costs per
ton of cement versus last year's levels.
Selling, general, and administrative expenses (SG&A), excluding the effect of
the consolidation of RMC, increased 0.26 percentage points as a percentage of
net sales versus first quarter 2004. Higher worldwide energy costs have
increased transportation costs throughout our markets.
EBITDA reached US$633 million, representing an increase of 14% over that of
first quarter 2004. Excluding the effect of the consolidation of RMC, EBITDA
grew 5% to US$583 million. This increase is due to the continued recovery in
cement prices and higher domestic cement and ready-mix volumes, which offset
higher energy and transportation costs.
Marketable securities gain (loss) for the quarter was a gain of US$182 million
versus a loss of US$11 million in first quarter 2004. The gain was due mainly
to the positive effect of our derivative instruments put in place to hedge the
purchase price of the remaining share capital of RMC.
Majority net income for the quarter rose 43%, to US$444 million from US$311
million in first quarter 2004. Excluding the effect of the consolidation of
RMC, majority net income grew 35% to US$421 million. This increase is due to
strong consolidated operating performance and to gains resulting from our
derivative positions.
Net debt at the end of the first quarter 2005 was US$10,435 million, 87%
higher than at the end of 2004. The increase in net debt reflects the
acquisition of the remaining share capital of RMC- executed in March 2005 -
and the assumption of RMC's debt. The net-debt-to-EBITDA ratio increased to
3.2 times from 2.2 times at the end of 2004, while interest coverage remained
unchanged, at 6.8 times, from the previous quarter.
1) Consolidated results for the first quarter 2005 include one-month results
for RMC ending March 31, 2005. Results for first quarter 2004 do not include
the effect of RMC.
CEMEX
EBITDA and Free Cash Flow(1) [logo omitted]
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First quarter January - March
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2005 2004 % Var. 2005 2004 % Var.
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Operating income 440 393 12% 440 393 12%
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+ Depreciation and operating amortization 193 164 193 164
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EBITDA 633 557 14% 633 557 14%
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- Net financial expense 99 85 99 85
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- Capital expenditures 92 70 92 70
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- Change in working capital 128 97 128 97
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- Taxes paid 17 12 17 12
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- Other cash items (net) 1 4 1 4
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Free cash flow 296 289 2% 296 289 2%
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In millions of US dollars.
Consolidated results for the first quarter 2005 include RMC results for the
month of March 2005. Results for first quarter 2004 do not include the results
of RMC.
During the quarter, US$296 million of free cash flow, US$389 million in
proceeds from the sale of certain U.S. assets and an increase in net debt of
US$4.8 billion were used for the acquisition of the remaining share capital of
RMC (in the fourth quarter of 2004 CEMEX acquired approximately 18.8% of the
outstanding capital of RMC), the assumption of RMC's debt on the acquisition
date, RMC transaction costs, working capital of RMC for the first two months
of 2005, and other investments.
Debt-Related Information
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First quarter Fourth quarter First quarter
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2005 2004 % Var. 2004 2005 2004
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Total debt(2) 11,858 5,667 109% 5,931 Currency denomination
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Short-term 25% 22% 18% US dollar 58% 68%
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Long-term 75% 78% 82% Euro 22% 17%
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Cash and cash equivalents 1,297 316 310% 342 British pound 12% 0%
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Fair value of cross-currency swaps(2) 126 N/A N/A Yen 7% 15%
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Net debt(2) 10,435 5,352 95% 5,588 Other 1% 0%
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Interest expense 105 90 17% 98 Interest rate
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Interest coverage 6.8 5.7 6.8 Fixed 53% 64%
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Net debt/EBITDA 3.2 2.4 2.2 Variable 47% 36%
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In millions of US dollars, except ratios, which are calculated for the last-twelve-month period.
Other developments
On April 15, 2005, CEMEX issued two tranches under its Medium-Term Promissory
Notes Program ("Certificados Bursatiles"). The first tranche of notes consists
of MXN 2,140 million with a maturity of four years at an interest rate equal
to the 91-day Mexican treasury (CETES) plus 99 basis points. The second
tranche of notes consists of seven-year MXN 1,500 million at a fixed interest
rate of 11.54%. Both tranches were swapped to US dollars at fixed rates of
5.04% and 5.33%, respectively.
During the quarter we successfully completed the general syndication for the
funds required for the acquisition of RMC, with additional commitments of
US$1.0 billion. Overall, during the underwriting phase and general syndication
we received commitments of more than two times the funds needed to acquire
RMC, with the participation of 61 banks.
____________________________
(1) EBITDA and free cash flow (calculated as set forth above) are presented
herein because CEMEX believes that they are widely accepted as financial
indicators of its ability to internally fund capital expenditures and to
service or incur debt. EBITDA and free cash flow should not be considered
as indicators of CEMEX's financial performance, as alternatives to cash
flow, as measures of liquidity, or as being comparable to other similarly
titled measures of other companies. EBITDA is reconciled above to
operating income, which CEMEX considers to be the most comparable measure
as determined under generally accepted accounting principles in Mexico
(Mexican GAAP). Free cash flow is reconciled to EBITDA. CEMEX is not
required to prepare a statement of cash flows under Mexican accounting
principles and, as such does not have such Mexican-GAAP cash-flow
measures to present as comparable to EBITDA or free cash flow.
(2) During 2004, the Mexican Institute of Public Accountants issued Bulletin
C-10, "Derivative Financial Instruments and Hedging Activities", which is
effective beginning January 1, 2005. Bulletin C-10 details and
supplements issues related to the accounting of derivative financial
instruments. Among other aspects, Bulletin C-10 precludes the
presentation of two financial instruments as If they were a single
instrument (synthetic presentation). For this reason, beginning this
year, CEMEX recognizes the assets and liabilities resulting from the fair
value of cross-currency swaps ("CCS") separately from the financial debt
and such debt will be presented in the currencies originally negotiated.
Starting in 2001, CEMEX has effectively changed the original profile of
interest rates and currencies of financial debt associated to CCS, and
accordingly, until December 31, 2004, financial debt subject to these
instruments was presented in the currencies negotiated in the CCS,
through the recognition within debt, of the assets or liabilities
resulting from the fair value of such CCS. This reclassification will
have no impact on stockholders' equity or net income. For presentation
purposes, net debt will include the fair value of CCS associated with
debt.
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Please refer to the end of this report for definitions of terms, Page 2
US dollar translation methodology, and other important disclosures.
CEMEX
Equity-Related Information [logo omitted]
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One CEMEX ADR represents five CEMEX CPOs. The following amounts are expressed
in CPO terms.
Beginning-of-quarter CPO-equivalent units outstanding 1,697,492,965
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Exercise of stock options not hedged 213,002
Less increase (decrease) in the number of CPOs held in subsidiaries (443,245)
End-of-quarter CPO-equivalent units outstanding 1,698,149,212
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Outstanding units equal total shares issued by CEMEX less shares held in
subsidiaries.
Employee long-term compensation plans
As of March 31, 2005, directors, officers, and other employees under our
employee stock-option plans had 162,105,510 outstanding options. Starting in
2005, CEMEX will begin offering executives a stock-ownership program. The
plan's goal is to move CEMEX's long-term incentives from stock options to
programs based on restricted stock. As of March 31, 2005, 92% of executives'
total outstanding options can only be exercised into restricted stock, instead
of cash. The maximum claim of these options would represent 2.9% of our total
CPOs outstanding as of March 31, 2005.
Derivative Instruments
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CEMEX periodically utilizes derivative financial instruments such as
interest-rate and currency swaps, currency and equity forward contracts, and
options in order to execute its corporate financing strategy and to hedge its
stock-option plans. The following table shows the notional amount for each
type of derivative instrument and the aggregate fair market value for all of
CEMEX's derivative instruments as of the last day of each quarter presented.
First quarter (2) Fourth quarter (2)
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Notional amounts 2005 2004 2004
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Equity(1) 1,224 1,109 1,157
Foreign-exchange 3,709 2,654 6,016
Interest-rate 4,427 2,223 2,118
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Estimated aggregate fair market value (112) (278) 97
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In millions of US dollars.
The estimated aggregate fair market value represents the approximate
settlement result as of the valuation date, based upon quoted market prices
and estimated settlement costs, which fluctuate over time. Fair market values
and notional amounts do not represent amounts of cash currently exchanged
between the parties; cash amounts will be determined upon termination of the
contracts considering the notional amounts and quoted market prices as well as
other derivative items as of the settlement date. Fair market values should
not be viewed in isolation but rather in relation to the fair market values of
the underlying hedge transactions and the overall reduction in CEMEX's
exposure to the risks being hedged.
Note: Mexican GAAP ("Bulletin C-2") requires companies to recognize all
derivative financial instruments in the balance sheet as assets or
liabilities, at their estimated fair market value, with changes in such fair
market values recorded on the income statement. The exceptions to the general
rule until December 31, 2004, as they pertained to CEMEX, occurred when
transactions were entered into for cash-flow hedging purposes. In such cases,
changes in the fair market value of the related derivative instruments were
recognized temporarily in equity and were reclassified into earnings as the
inverse effects of the underlying hedged items flowed through the income
statement. Beginning in 2005, new Bulletin C-10, "Derivative Financial
Instruments and Hedging Activities", establishes the framework for hedge
accounting and overrides Bulletin C-2 in this respect; however, in respect to
cash-flow hedges, the new rules are the same as those applied by CEMEX since
2001. CEMEX has recognized increases in assets and liabilities, which resulted
in a net asset of US$41 million, arising from the fair market value
recognition of its derivatives portfolio as of March 31, 2005. The notional
amounts of derivatives substantially match the amounts of underlying assets,
liabilities, or equity transactions on which the derivatives are being entered
into.
________________________
(1) The aggregate weighted-average exercise price on March 31, 2005, for
CEMEX's outstanding stock options was US$35.86 per ADR. On that same
date, the aggregate weighted-average strike price of CEMEX's
equity-forward agreements put in place to hedge these stock options was
US$36.58 per ADR.
(2) Notional amounts and fair market values at the end of first quarter 2005
include derivative positions of RMC. First and fourth quarters of 2004
presented above do not include RMC.
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Please refer to the end of this report for definitions of terms, Page 3
US dollar translation methodology, and other important disclosures.
CEMEX
Other Activities [logo omitted]
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CEMEX completes acquisition of RMC
On March 1, 2005, CEMEX announced that it had completed the acquisition of
RMC. The boards of directors of CEMEX and RMC, as well as RMC shareholders,
European Union and US regulators, and the High Court of Justice in England and
Wales approved the acquisition. The equity value of the transaction was US$4.1
billion (net of received proceeds from our GBP/USD derivatives put in place to
hedge the equity value).
With the integration of RMC, CEMEX has an estimated 97 million metric tons of
cement, enhancing its position as the third-largest cement company in the
world. With RMC, CEMEX is now the largest ready mix company in the world, with
a production capacity of 77 million cubic meters of ready-mix concrete, and is
also the fourth-largest aggregates company in the world.
The addition of RMC improves the balance of CEMEX's portfolio by diversifying
cash flows, better positioning CEMEX for profitable growth throughout business
and economic cycles. RMC's leading position in Europe extends CEMEX's reach
into new markets that complement CEMEX's solid position in the Americas,
increasing trading opportunities and expanding CEMEX's ability to serve more
customers.
CEMEX expects to achieve annual synergies in excess of US$200 million of by
2007 by standardizing some management processes, capitalizing on trading
network benefits, consolidating logistics and improving global procurement and
energy efficiency.
The acquisition is expected to be immediately accretive to free cash flow and
cash earnings per share for CEMEX. CEMEX expects that the acquisition will
achieve its target of 10% return on capital employed in 2007 and expects to
achieve a ratio of net debt to EBITDA of 2.7 times by the end of 2005. This
would be the same level of net debt to EBITDA that CEMEX had at the end of
2003.
CEMEX completes sale of U.S. assets
On March 31, 2005, CEMEX announced that it completed the sale of certain CEMEX
assets in the Great Lakes region of the United States to Votorantim
Participacoes S.A.
Votorantim acquired the Charlevoix and Dixon-Marquette cement plants and
certain distribution terminals located in the Great Lakes region.
CEMEX began evaluating alternatives to divest these assets in 2004, after
reviewing its strategic position in the U.S. The transaction was structured as
a sale of assets. The value of the transaction was approximately US$389.5
million.
Total production capacity of both cement plants is close to 2 million metric
tons per year, which represented approximately nine percent of the 2004
operating cash-flow generation of CEMEX's US business prior to the RMC
acquisition.
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Please refer to the end of this report for definitions of terms, Page 4
US dollar translation methodology, and other important disclosures.
CEMEX
Operating Results--Mexico [logo omitted]
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Net sales were US$682 million, representing a decrease of 2% versus first
quarter 2004.
Domestic cement volume decreased 7% versus first quarter 2004, while ready-mix
volume increased 12%. Cement demand during the quarter was affected by adverse
weather - particularly during the first two months of the year - and fewer
business days as a result of the earlier occurrence of religious holidays,
which last year took place during the second quarter. Adjusting for the fewer
business days in the quarter, cement volumes would have decreased 2% versus
first quarter 2004. The main driver of cement demand in Mexico during the
first quarter was the residential sector. Low-income housing - and, to a
lesser extent, middle-and high-income housing supported by gradually
increasing commercial bank financing - remains strong. The infrastructure and
the self-construction sectors remain stable.
Average realized cement price decreased 3% in constant pesos, and increased 1%
in dollar terms, versus first quarter 2004. Compared to fourth quarter 2004,
cement prices increased 2% in constant peso terms and 4% in dollar terms. The
average ready-mix price decreased 1% in constant peso terms and increased 3%
in dollar terms compared with first quarter 2004.
The EBITDA margin decreased to 41.1% from 45.3% in first quarter 2004. The
decrease of 4.2 percentage points was due mainly to a change in the product
mix resulting from a higher proportion of ready-mix and multiproduct sales,
higher fuels costs, and lower volumes.
United States
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(Results exclude the effect of the consolidation of RMC)
Net sales were US$491 million, representing an increase of 22% compared with
first quarter 2004.
Domestic cement volume remained flat versus first quarter 2004 while ready-mix
volume increased 6%. Construction activity remains strong, with
month-over-month increases in construction spending since May 2003. Cement and
ready-mix sales continue to be driven by increased spending in infrastructure
- streets and highways in particular - and residential construction. However,
unfavorable weather conditions during the quarter, especially in the western
United States, have affected cement demand; precipitation in CEMEX markets
during the quarter was up 25% compared to that in first quarter of 2004.
The average realized cement price increased 18% versus first quarter 2004,
while the average ready-mix price increased 25% over the same period.
The EBITDA margin increased to 21.9% from 18.4% in first quarter 2004. The
increase of 3.5 percentage points was due mainly to higher cement and
ready-mix prices, which were partially offset by higher fuel, import, and
transportation costs.
Spain
--------------------------------------------------------------------------------
(Results exclude the effect of the consolidation of RMC)
Net sales were US$335 million, representing an increase of 15% versus first
quarter 2004.
Domestic cement volume increased 4% over that of first quarter 2004 while
ready-mix volume increased 5%. The residential sector continues to be one of
the main drivers of demand, with increased housing starts. Public-works
spending is also growing and represents an important component of cement
consumption; the sector's primary catalyst continues to be Spain's
infrastructure plan.
The average domestic cement price increased 5% in euro terms and 11% in dollar
terms compared with first quarter 2004. The average ready-mix price increased
4% in euro terms and 10% in dollar terms versus first quarter 2004.
The EBITDA margin increased to 33.6% from 31.2% in first quarter 2004. The
increase of 2.4 percentage points was due mainly to better cement and
ready-mix volumes and prices, offsetting higher fuel costs.
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Please refer to the end of this report for definitions of terms, Page 5
US dollar translation methodology, and other important disclosures.
CEMEX
Venezuela [logo omitted]
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Net sales were US$80 million, representing an increase of 7% versus first
quarter 2004.
Domestic cement volume increased 8% in first quarter 2005 versus the same
period in 2004, while ready-mix volume decreased 3%. The Venezuelan economy is
being driven, in part, by public spending due mainly to higher oil revenues.
Consumer credit has risen 60% versus last year's levels and has in turn
increased consumer spending. The main drivers of cement demand during the
quarter were the self-construction and commercial sectors. Construction from
the private sector is increasing as confidence in the economy recovers.
Export volume decreased 11% compared with first quarter 2004. Exports to North
America, and to Central America and the Caribbean accounted for 66% and 34%,
respectively, of CEMEX Venezuela's first-quarter exports.
Domestic cement prices decreased 4% in constant bolivar terms and increased 2%
in dollar terms compared with first quarter 2004. The average ready-mix price
increased 8% in constant bolivar terms and increased 15% in dollar terms
compared with first quarter 2004.
The EBITDA margin increased to 42.5% from 41.9% in first quarter 2004. The
increase of 0.6 percentage points was due mainly to the change in the product
mix resulting from higher domestic cement and ready-mix volumes and lower
export volumes, offsetting higher fuel and electricity costs.
Colombia
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Net sales were US$60 million, representing an increase of 5% over first
quarter 2004.
Domestic cement volume increased 28% in first quarter 2005 versus the same
quarter last year, while ready-mix volume increased 3%. The main driver of
cement demand during the quarter was the self-construction sector and to a
lesser extent, the commercial sector. Public spending, which did not increase
during last year, is now showing signs of recovery, with new projects underway
in several regions of the country.
Average realized cement price decreased 34% in Colombian pesos and 25% in
dollar terms versus first quarter 2004 due to competitive pressures in the
market while the average ready-mix price decreased 2% in Colombian pesos and
rose 12% in dollar terms.
The EBITDA margin decreased to 35.9% from 59.3% in first quarter 2004. The
decrease of 23.4 percentage points was due to lower cement prices and higher
fuel costs.
Other Operations
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(Results exclude the effect of the consolidation of RMC)
Net sales for our Central American and Caribbean operations increased 2%
versus first quarter 2004, reaching US$159 million. Domestic cement volume
increased 2% as all of our markets in the region, with the exception of the
Dominican Republic, increased their cement volumes. Ready-mix volume increased
8% due to increased volumes in all of our markets, with the exception of
Puerto Rico.
In Egypt, net sales and EBITDA increased 40% and 67%, respectively, while
domestic cement volume increased 9%, versus first quarter 2004. Domestic
cement prices increased 17% in Egyptian pound terms and 25% in dollar terms
versus first quarter 2004. The increase in cement sales volumes reflects
increased confidence in the Egyptian economy; tourism revenues and private
construction have increased. The housing and infrastructure sectors have been
the main drivers of demand during the quarter.
Our Asian operations increased their net sales by 15% compared with first
quarter 2004. EBITDA was 22% higher during the quarter, due mainly to better
prices in dollar terms. Domestic cement volume for the region remained flat
for the quarter, as lower volumes in the Philippines were offset by higher
volumes in Thailand and Bangladesh. Our weighted-average domestic cement
prices in the region increased 13% during the quarter versus the comparable
period in 2004. The EBITDA margin for the region increased 1.8 percentage
points, to 30.0% from 28.2%, in first quarter 2004, due mainly to the recovery
of cement prices and a reduction in SG&A expenses.
--------------------------------------------------------------------------------
Please refer to the end of this report for definitions of terms, Page 6
US dollar translation methodology, and other important disclosures.
Consolidated Income Statement & Balance Sheet
Includes one-month results of RMC ending March 31, 2005. Results for first quarter 2004 do not include RMC
CEMEX S.A. de C.V. AND SUBSIDIARIES
(Thousands of U.S. Dollars, except per ADR amounts)
January - March First quarter
INCOME STATEMENT 2005 2004 % Var. 2005 2004 % Var.
--------------------------------------------------------------------------------------------------------------------------------
Net Sales 2,585,242 1,808,960 43% 2,585,242 1,808,960 43%
Cost of Sales (1,538,372) (1,032,963) 49% (1,538,372) (1,032,963) 49%
--------------------------------------------------------------------------------------------------------------------------------
Gross Profit 1,046,870 775,997 35% 1,046,870 775,997 35%
Selling, General and Administrative Expenses (606,641) (383,164) 58% (606,641) (383,164) 58%
--------------------------------------------------------------------------------------------------------------------------------
Operating Income 440,229 392,833 12% 440,229 392,833 12%
Financial Expenses (105,409) (89,907) 17% (105,409) (89,907) 17%
Financial Income 7,050 4,863 45% 7,050 4,863 45%
Exchange Gain (Loss), Net (38,931) 12,179 N/A (38,931) 12,179 N/A
Monetary Position Gain (Loss) 50,932 128,391 (60%) 50,932 128,391 (60%)
Gain (Loss) on Marketable Securities 182,244 (11,244) N/A 182,244 (11,244) N/A
Total Comprehensive Financing (Cost) Income 95,886 44,281 117% 95,886 44,281 117%
Other Expenses, Net (28,801) (75,556) (62%) (28,801) (75,556) (62%)
--------------------------------------------------------------------------------------------------------------------------------
Net Income Before Income Taxes 507,314 361,558 40% 507,314 361,558 40%
Income Tax (63,922) (43,129) 48% (63,922) (43,129) 48%
Employees' Statutory Profit Sharing (2,711) (2,292) 18% (2,711) (2,292) 18%
Total Income Tax & Profit Sharing (66,633) (45,421) 47% (66,633) (45,421) 47%
--------------------------------------------------------------------------------------------------------------------------------
Net Income Before Participation
of Uncons. Subs. and Ext. Items 440,681 316,137 39% 440,681 316,137 39%
Participation in Unconsolidated Subsidiaries 6,273 2,028 209% 6,273 2,028 209%
Consolidated Net Income 446,954 318,165 40% 446,954 318,165 40%
Net Income Attributable to Min. Interest 3,024 6,886 (56%) 3,024 6,886 (56%)
MAJORITY INTEREST NET INCOME 443,930 311,279 43% 443,930 311,279 43%
--------------------------------------------------------------------------------------------------------------------------------
EBITDA 633,203 556,518 14% 633,203 556,518 14%
Earnings per ADR 1.31 0.96 36% 1.31 0.96 36%
--------------------------------------------------------------------------------------------------------------------------------
As of March 31
BALANCE SHEET 2005 2004 % Var.
--------------------------------------------------------------------------------------------------------------------------------
Total Assets 26,470,681 16,457,796 61%
Cash and Temporary Investments 1,296,537 315,511 311%
Trade Accounts Receivables 1,678,820 466,017 260%
Other Receivables 788,371 555,613 42%
Inventories 1,190,353 633,027 88%
Other Current Assets 145,275 95,079 53%
Current Assets 5,099,356 2,065,247 147%
Fixed Assets 13,623,759 9,149,523 49%
Other Assets 7,747,566 5,243,027 48%
-------------------------------------------------------------------------------------------
Total Liabilities 17,819,731 9,655,673 85%
Current Liabilities 5,875,724 3,053,011 92%
Long-Term Liabilities 8,909,154 4,443,278 101%
Other 3,034,854 2,159,384 41%
Liabilities
-------------------------------------------------------------------------------------------
Consolidated Stockholders' Equity 8,650,950 6,802,123 27%
Stockholders' Equity Attributable to
Minority Interest 551,570 418,639 32%
Stockholders' Equity Attributable to
Majority Interest 8,099,379 6,383,484 27%
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar translation methodology Page 7
and other important disclosures.
Consolidated Income Statement & Balance Sheet
Includes one-month results of RMC ending March 31, 2005. Results for first quarter 2004 do not include RMC
CEMEX S.A. de C.V. AND SUBSIDIARIES
(Thousands of Mexican Pesos in real terms as of March 31, 2005
except per ADR amounts)
January - March First quarter
INCOME STATEMENT 2005 2004 % Var. 2005 2004 % Var.
----------------------------------------------------------------------------------------------------------------------------------
Net Sales 28,851,299 21,489,533 34% 28,851,299 21,489,533 34%
Cost of Sales (17,168,231) (12,271,085) 40% (17,168,231) (12,271,085) 40%
----------------------------------------------------------------------------------------------------------------------------------
Gross Profit 11,683,067 9,218,448 27% 11,683,067 9,218,448 27%
Selling, General and Administrative Expenses (6,770,109) (4,551,793) 49% (6,770,109) (4,551,793) 49%
----------------------------------------------------------------------------------------------------------------------------------
Operating Income 4,912,958 4,666,655 5% 4,912,958 4,666,655 5%
Financial Expenses (1,176,365) (1,068,050) 10% (1,176,365) (1,068,050) 10%
Financial Income 78,683 57,768 36% 78,683 57,768 36%
Exchange Gain (Loss), Net (434,474) 144,679 N/A (434,474) 144,679 N/A
Monetary Position Gain (Loss) 568,400 1,525,218 (63%) 568,400 1,525,218 (63%)
Gain (Loss) on Marketable Securities 2,033,843 (133,578) N/A 2,033,843 (133,578) N/A
Total Comprehensive Financing (Cost) Income 1,070,088 526,036 103% 1,070,088 526,036 103%
Other Expenses, Net (321,422) (897,568) (64%) (321,422) (897,568) (64%)
----------------------------------------------------------------------------------------------------------------------------------
Net Income Before Income Taxes 5,661,624 4,295,124 32% 5,661,624 4,295,124 32%
Income Tax (713,365) (512,351) 39% (713,365) (512,351) 39%
Employees' Statutory Profit Sharing (30,259) (27,228) 11% (30,259) (27,228) 11%
Total Income Tax & Profit Sharing (743,624) (539,579) 38% (743,624) (539,579) 38%
----------------------------------------------------------------------------------------------------------------------------------
Net Income Before Participation
of Uncons. Subs. and Ext. Items 4,918,000 3,755,545 31% 4,918,000 3,755,545 31%
Participation in Unconsolidated Subsidiaries 70,011 24,096 191% 70,011 24,096 191%
Consolidated Net Income 4,988,011 3,779,641 32% 4,988,011 3,779,641 32%
Net Income Attributable to Min. Interest 33,748 81,803 (59%) 33,748 81,803 (59%)
MAJORITY INTEREST NET INCOME 4,954,263 3,697,838 34% 4,954,263 3,697,838 34%
----------------------------------------------------------------------------------------------------------------------------------
EBITDA 7,066,544 6,611,158 7% 7,066,544 6,611,158 7%
Earnings per ADR 14.59 10.68 37% 14.59 10.68 37%
----------------------------------------------------------------------------------------------------------------------------------
As of March 31
----------------------------
BALANCE SHEET 2005 2004 % Var.
----------------------------------------------------------------------------------------------------------------------------------
Total Assets 295,412,799 195,510,327 51%
Cash and Temporary Investments 14,469,357 3,748,112 286%
Trade Accounts Receivables 18,735,632 5,536,046 238%
Other Receivables 8,798,217 6,600,408 33%
Inventories 13,284,341 7,520,039 77%
Other Current Assets 1,621,272 1,129,485 44%
Current Assets 56,908,818 24,534,091 132%
Fixed Assets 152,041,149 108,691,721 40%
Other Assets 86,462,832 62,284,516 39%
------------------------------------------------------------------------------------------
Total Liabilities 198,868,201 114,704,533 73%
Current Liabilities 65,573,077 36,268,227 81%
Long-Term Liabilities 99,426,157 52,783,906 88%
Other Liabilities 33,868,967 25,652,399 32%
------------------------------------------------------------------------------------------
Consolidated Stockholders' Equity 96,544,598 80,805,793 19%
Stockholders' Equity Attributable to
Minority Interest 6,155,525 4,973,217 24%
Stockholders' Equity Attributable to
Majority Interest 90,389,073 75,832,576 19%
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar translation methodology Page 8
and other important disclosures.
Operating Summary per Country
In thousands of U.S. dollars
January - March First quarter
--------------------------- -------------------------
NET SALES 2005 2004 % Var. 2005 2004 % Var.
-------------------------------------------------------------------------------------------------------------------------------
Mexico 681,650 696,946 (2%) 681,650 696,946 (2%)
U.S.A. 490,842 403,966 22% 490,842 403,966 22%
Spain 334,569 291,915 15% 334,569 291,915 15%
Venezuela 80,146 75,226 7% 80,146 75,226 7%
Colombia 59,819 56,834 5% 59,819 56,834 5%
Egypt 59,513 42,637 40% 59,513 42,637 40%
Central America & the Caribbean region 159,340 155,712 2% 159,340 155,712 2%
Asia region 56,791 49,554 15% 56,791 49,554 15%
-------------------------------------------------------------------------------------------------------------------------------
RMC operations (1) 628,750 N/A N/A 628,750 N/A N/A
-------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations 33,823 36,170 (6%) 33,823 36,170 (6%)
-------------------------------------------------------------------------------------------------------------------------------
TOTAL 2,585,242 1,808,960 43% 2,585,242 1,808,960 43%
===============================================================================================================================
GROSS PROFIT
-------------------------------------------------------------------------------------------------------------------------------
Mexico 369,217 400,249 (8%) 369,217 400,249 (8%)
U.S.A. 162,037 123,783 31% 162,037 123,783 31%
Spain 130,730 105,759 24% 130,730 105,759 24%
Venezuela 33,443 31,162 7% 33,443 31,162 7%
Colombia 23,624 34,313 (31%) 23,624 34,313 (31%)
Egypt 31,997 20,434 57% 31,997 20,434 57%
Central America & the Caribbean region 46,945 55,852 (16%) 46,945 55,852 (16%)
Asia region 22,564 19,586 15% 22,564 19,586 15%
-------------------------------------------------------------------------------------------------------------------------------
RMC operations (1) 210,397 N/A N/A 210,397 N/A N/A
-------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations 15,916 (15,141) N/A 15,916 (15,141) N/A
-------------------------------------------------------------------------------------------------------------------------------
TOTAL 1,046,870 775,997 35% 1,046,870 775,997 35%
===============================================================================================================================
OPERATING INCOME
-------------------------------------------------------------------------------------------------------------------------------
Mexico 241,709 277,499 (13%) 241,709 277,499 (13%)
U.S.A. 66,041 35,413 86% 66,041 35,413 86%
Spain 91,808 71,438 29% 91,808 71,438 29%
Venezuela 20,185 20,793 (3%) 20,185 20,793 (3%)
Colombia 13,188 26,187 (50%) 13,188 26,187 (50%)
Egypt 24,343 11,725 108% 24,343 11,725 108%
Central America & the Caribbean region 25,859 37,734 (31%) 25,859 37,734 (31%)
Asia region 12,318 7,088 74% 12,318 7,088 74%
-------------------------------------------------------------------------------------------------------------------------------
RMC operations (1) 23,161 N/A N/A 23,161 N/A N/A
-------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations (78,381) (95,043) (18%) (78,381) (95,043) (18%)
-------------------------------------------------------------------------------------------------------------------------------
TOTAL 440,229 392,833 12% 440,229 392,833 12%
===============================================================================================================================
EBITDA
-------------------------------------------------------------------------------------------------------------------------------
Mexico 279,823 315,782 (11%) 279,823 315,782 (11%)
U.S.A. 107,319 74,332 44% 107,319 74,332 44%
Spain 112,354 91,214 23% 112,354 91,214 23%
Venezuela 34,061 31,491 8% 34,061 31,491 8%
Colombia 21,462 33,711 (36%) 21,462 33,711 (36%)
Egypt 32,134 19,192 67% 32,134 19,192 67%
Central America & the Caribbean region 35,333 47,232 (25%) 35,333 47,232 (25%)
Asia region 17,036 13,993 22% 17,036 13,993 22%
-------------------------------------------------------------------------------------------------------------------------------
RMC operations (1) 50,493 N/A N/A 50,493 N/A N/A
-------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations (56,812) (70,427) (19%) (56,812) (70,427) (19%)
-------------------------------------------------------------------------------------------------------------------------------
TOTAL 633,203 556,518 14% 633,203 556,518 14%
-------------------------------------------------------------------------------------------------------------------------------
1) Results include all RMC operations for the month of March 2005.
-----------------------------------------------------------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar translation methodology Page 9
and other important disclosures.
Operating Summary per Country
Does not include the effect of RMC
As a percentage of net sales
January - March First quarter
------------------------- -------------------------
OPERATING INCOME MARGIN 2005 2004 2005 2004
--------------------------------------------------------------------------------------------------------------------------
Mexico 35.5% 39.8% 35.5% 39.8%
U.S.A. 13.5% 8.8% 13.5% 8.8%
Spain 27.4% 24.5% 27.4% 24.5%
Venezuela 25.2% 27.6% 25.2% 27.6%
Colombia 22.0% 46.1% 22.0% 46.1%
Egypt 40.9% 27.5% 40.9% 27.5%
Central America & the Caribbean region 16.2% 24.2% 16.2% 24.2%
Asia region 21.7% 14.3% 21.7% 14.3%
--------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED MARGIN 21.3% 21.7% 21.3% 21.7%
--------------------------------------------------------------------------------------------------------------------------
EBITDA MARGIN
--------------------------------------------------------------------------------------------------------------------------
Mexico 41.1% 45.3% 41.1% 45.3%
U.S.A. 21.9% 18.4% 21.9% 18.4%
Spain 33.6% 31.2% 33.6% 31.2%
Venezuela 42.5% 41.9% 42.5% 41.9%
Colombia 35.9% 59.3% 35.9% 59.3%
Egypt 54.0% 45.0% 54.0% 45.0%
Central America & the Caribbean region 22.2% 30.3% 22.2% 30.3%
Asia region 30.0% 28.2% 30.0% 28.2%
--------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED MARGIN 29.8% 30.8% 29.8% 30.8%
--------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar translation methodology Page 10
and other important disclosures.
Volume Summary
Consolidated volume summary (1)
Cement and aggregates: Thousands of metric tons
Ready-mix: Thousands of cubic meters
January - March First quarter
--------------------------- -----------------------
2005 2004 % Var. 2005 2004 % Var.
--------------------------------------------------------------------------------------------------------------------------------
Consolidated cement volume 15,470 15,686 -1% 15,470 15,686 -1%
Consolidated ready-mix volume 9,760 5,615 74% 9,760 5,615 74%
Consolidated aggregates volume 19,891 8,667 130% 19,891 8,667 130%
--------------------------------------------------------------------------------------------------------------------------------
Per-country volume summary (2)
First quarter
January - March --------------------- First quarter 2005 Vs.
DOMESTIC CEMENT VOLUME 2005 Vs. 2004 2005 Vs. 2004 Fourth quarter 2004
---------------------------------------------------------------------------------------------------------------------------------
Mexico (7%) (7%) (6%)
U.S.A. 0% 0% (14%)
Spain 4% 4% (0%)
Venezuela 8% 8% (2%)
Colombia 28% 28% 13%
Egypt 9% 9% 24%
Central America & the Caribbean region 2% 2% 7%
Asia Region (0%) (0%) 11%
---------------------------------------------------------------------------------------------------------------------------------
READY-MIX VOLUME
---------------------------------------------------------------------------------------------------------------------------------
Mexico 12% 12% (8%)
U.S.A. 6% 6% 5%
Spain 5% 5% 2%
Venezuela (3%) (3%) 1%
Colombia 3% 3% (1%)
Central America & the Caribbean region 8% 8% 18%
Asia Region N/A N/A N/A
---------------------------------------------------------------------------------------------------------------------------------
EXPORT CEMENT VOLUME
---------------------------------------------------------------------------------------------------------------------------------
Mexico 57% 57% (1%)
Spain (31%) (31%) (20%)
Venezuela (11%) (11%) (23%)
---------------------------------------------------------------------------------------------------------------------------------
1) Consolidated volumes include the results of RMC for the one-month period
ending March 31, 2005. Results for first quarter 2004 do not include RMC.
2) Results for each country/region do not include the results of RMC.
--------------------------------------------------------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar translation methodology Page 11
and other important disclosures.
Price Summary
Does not include the effect of RMC
January - March First quarter
--------------- --------------- First quarter 2005 Vs.
DOMESTIC CEMENT PRICE 2005 Vs. 2004 2005 Vs. 2004 Fourth quarter 2004
------------------------------------------------------------------------------------------------------------------
Mexico 1% 1% 4%
U.S.A. 18% 18% 7%
Spain 11% 11% 4%
Venezuela 2% 2% 1%
Colombia (25%) (25%) (21%)
Egypt 25% 25% 5%
Central America & the (0%) (0%) (1%)
Caribbean region (2)
Asia Region (2) 13% 13% 5%
------------------------------------------------------------------------------------------------------------------
READY-MIX PRICE
------------------------------------------------------------------------------------------------------------------
Mexico 3% 3% (0%)
U.S.A. 25% 25% 6%
Spain 10% 10% 1%
Venezuela 15% 15% 0%
Colombia 12% 12% 1%
Central America & the
Caribbean region (2) 4% 4% 2%
------------------------------------------------------------------------------------------------------------------
Local Currency
January - March First quarter First quarter 2005 Vs.
--------------- ---------------
DOMESTIC CEMENT PRICE 2005 Vs. 2004 2005 Vs. 2004 Fourth quarter 2004
------------------------------------------------------------------------------------------------------------------
Mexico (1) (3%) (3%) 2%
U.S.A. 18% 18% 7%
Spain 5% 5% 5%
Venezuela (1) (4%) (4%) 1%
Colombia (34%) (34%) (25%)
Egypt 17% 17% (1%)
Central America & the N/A N/A N/A
Caribbean region (2)
Asia Region (2) N/A N/A N/A
------------------------------------------------------------------------------------------------------------------
READY-MIX PRICE
------------------------------------------------------------------------------------------------------------------
Mexico (1) (1%) (1%) (2%)
U.S.A. 25% 25% 6%
Spain 4% 4% 1%
Venezuela (1) 8% 8% 1%
Colombia (2%) (2%) (4%)
Central America & the N/A N/A N/A
Caribbean region (2)
------------------------------------------------------------------------------------------------------------------
1) Local currency price variation for Mexico and Venezuela is presented in constant currency terms as of March 31, 2005.
2) Volume weighted-average price.
------------------------------------------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S.dollar translation methodology Page 12
and other important disclosures.
Consolidated Income Statement
---------------------------------------------------------------------------------------------------------------------------------
Excluding the effect of RMC operations for first quarter 2005 and 2004
CEMEX S.A. de C.V. AND SUBSIDIARIES
(Thousands of U.S. Dollars, except per ADR amounts)
January - March First quarter
------------------------------ -----------------------
2005 2004 % Var. 2005 2004 % Var.
---------------------------------------------------------------------------------------------------------------------------------
Net Sales 1,956,492 1,808,960 8% 1,956,492 1,808,960 8%
Cost of Sales (1,120,019) (1,032,963) 8% (1,120,019) (1,032,963) 8%
---------------------------------------------------------------------------------------------------------------------------------
Gross Profit 836,473 775,997 8% 836,473 775,997 8%
Selling, General and Administrative Expenses (419,405) (383,164) 9% (419,405) (383,164) 9%
---------------------------------------------------------------------------------------------------------------------------------
Operating Income 417,068 392,833 6% 417,068 392,833 6%
Financial Expenses (102,163) (89,907) 14% (102,163) (89,907) 14%
Financial Income 6,508 4,863 34% 6,508 4,863 34%
Exchange Gain (Loss), Net (38,931) 12,179 N/A (38,931) 12,179 N/A
Monetary Position Gain (Loss) 50,932 128,391 (60%) 50,932 128,391 (60%)
Gain (Loss) on Marketable Securities 182,244 (11,244) N/A 182,244 (11,244) N/A
Total Comprehensive Financing (Cost) Income 98,590 44,281 123% 98,590 44,281 123%
Other Expenses, Net (32,380) (75,556) (57%) (32,380) (75,556) (57%)
---------------------------------------------------------------------------------------------------------------------------------
Net Income Before Income Taxes 483,278 361,558 34% 483,278 361,558 34%
Income Tax (60,893) (43,129) 41% (60,893) (43,129) 41%
Employees' Statutory Profit Sharing (2,711) (2,292) 18% (2,711) (2,292) 18%
Total Income Tax & Profit Sharing (63,604) (45,421) 40% (63,604) (45,421) 40%
---------------------------------------------------------------------------------------------------------------------------------
Net Income Before Participation
of Uncons. Subs. and Ext. Items 419,673 316,137 33% 419,673 316,137 33%
Participation in Unconsolidated Subsidiaries 3,533 2,028 74% 3,533 2,028 74%
Consolidated Net Income 423,207 318,165 33% 423,207 318,165 33%
Net Income Attributable to Min. Interest 2,489 6,886 (64%) 2,489 6,886 (64%)
MAJORITY INTEREST NET INCOME 420,718 311,279 35% 420,718 311,279 35%
---------------------------------------------------------------------------------------------------------------------------------
EBITDA 582,710 556,518 5% 582,710 556,518 5%
Earnings per ADR 1.24 0.96 29% 1.12 0.96 29%
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar translation methodology Page 13
and other important disclosures.
CEMEX
Definition of Terms and Disclosures [logo omitted]
--------------------------------------------------------------------------------
Methodology for consolidation and presentation of results
CEMEX consolidates its results in Mexican pesos under Mexican generally
accepted accounting principles (GAAP). For the reader's convenience, US dollar
amounts for the consolidated entity are calculated by converting the constant
Mexican peso amounts at the end of each quarter using the period-end MXN/US$
exchange rate for each quarter. The exchange rates used to convert results for
first quarter 2005, fourth quarter 2004, and first quarter 2004 are 11.16,
11.14, and 11.12 Mexican pesos per US dollar, respectively. CEMEX's
weighted-average inflation factor between March 31, 2004, and March 31, 2005,
was 6.83%.
Per-country figures are presented in US dollars for the reader's convenience.
In the consolidation process, each country's figures (except those of CEMEX
Mexico) are converted to US dollars and then to Mexican pesos under Mexican
GAAP. Each country's figures presented in US dollars as of March 31, 2005, and
March 31, 2004, can be converted into their original local currency amount by
multiplying the US-dollar figure by the corresponding exchange rate provided
below.
To convert March 31, 2004, US-dollar figures for Mexico and Venezuela to
constant Mexican pesos and bolivars, respectively, as of March 31, 2005, it is
necessary to first convert the March 31, 2004, US-dollar figure to the
corresponding local currency (using the exchange rates provided below), and
then multiply the resulting amount by the inflation-rate factor provided in
the table below.
March 31
----------------------------
Exchange rate 2005 2004 Inflation-rate factor
----------------------------------------------------------------------------
Mexico 11.16 11.12 1.042
Spain 0.77 0.81
Venezuela 2,150 1,920 1.158
Colombia 2,376 2,678
Egypt 5.82 6.2
----------------------------------------------------------------------------
Amounts provided in units of local currency per US dollar.
The Central America and Caribbean region includes CEMEX's operations in Costa
Rica, the Dominican Republic, Panama, Nicaragua, and Puerto Rico as well as
our trading operations in the Caribbean region. The Asia region includes
CEMEX's operations in the Philippines, Taiwan, Thailand, and Bangladesh.
Definition of terms
EBITDA equals operating income plus depreciation and operating amortization.
Free cash flow equals EBITDA minus net interest expense, capital expenditures,
change in working capital, taxes paid, dividends on preferred equity, and
other cash items (net other expenses less non-operating asset disposals).
Capital expenditures consist of maintenance and expansion spending on our
cement, ready-mix, and other core businesses in existing markets.
Working capital equals operating accounts receivable (including other current
assets received as payment in kind) plus historical inventories minus
operating payables.
Net debt equals total debt minus the fair value of cross-currency swaps
associated with debt minus cash and cash equivalents.
Interest coverage is calculated by dividing EBITDA for the last twelve months
by interest expense for the last twelve months (all amounts in constant
currency terms).
Net debt/EBITDA is calculated by dividing net debt at the end of the quarter
by EBITDA (in constant currency terms) for the last twelve months. This ratio
includes CEMEX's EBITDA for the last twelve months plus the estimated EBITDA
of RMC for the last twelve months.
Earnings per ADR
The number of average ADRs outstanding used for the calculation of earnings
per ADR was 339.6 million for first quarter 2005 and 324.2 for first quarter
2004.
-------------------------------------------------------------------------------
Page 14
CEMEX
Definition of Terms and Disclosures [logo omittied]
--------------------------------------------------------------------------------
Effect of the purchase of RMC in our financial statements
As previously mentioned, the acquisition of RMC was concluded on March 1,
2005. The consolidated financial statements of CEMEX and subsidiaries as of
March 31, 2005, include the balance sheet of RMC group as of March 31, 2005,
and the results of operations for the one-month period ended March 31, 2005.
The processes to allocate the purchase price paid for RMC's shares of
approximately US$4.1 billion, not including other direct purchase costs, to
the fair values of the assets acquired and liabilities assumed, substantially
began during March 2005 concurrent with the assumption of control by CEMEX;
consequently, as of March 31, 2005, CEMEX is in a preliminary stage in terms
of determining the fair values of the net assets of RMC, including acquired
intangible assets. Therefore, as of March 31, 2005, the difference between the
purchase price paid and the book value of RMC as of March 1, 2005, was fully
allocated to goodwill for an amount of approximately U.S.$2.2 billion.
In subsequent periods, as we move forward in our determination of the fair
values of RMC's assets and liabilities, the amount of initial goodwill will be
adjusted against the corresponding balance-sheet accounts. Under Mexican GAAP,
entities have up to a one-year window period after the purchase to conclude
the purchase-price allocation.
--------------------------------------------------------------------------------
Page 15