* Cemex posts weak profit but beats expectations
* Net sales and EBITDA fall as U.S. volumes slump
* No sign of recovery in global construction sector
(Recasts, adds analyst comment, background on asset sales)
By Robin Emmott
MONTERREY, Mexico, July 28 Mexico's Cemex, the
world's No. 3 cement maker, reported weak but slightly rosier
than expected second-quarter net profits on Tuesday as it limps
through the global economic crisis under a heavy debt load.
Cemex (CMXCPO.MX) (CX.N) said its net profit fell 58 percent
to $187 million in the April-to-June period as sales in its key
European and U.S. markets tumbled and global stimulus packages
have yet to revive battered construction sectors.
Seven analysts polled by Reuters had predicted net profit of
$164 million in the quarter.
But their estimates for earnings before interest, taxes,
depreciation and amortization (EBITDA) were $34 million higher
than the $812 million Cemex reported.
The company's EBITDA fell 41 percent in the second quarter
while net sales dropped 33 percent to $4.2 billion, also below
"The company's numbers have come in weak, but the market is
more focused on its debt refinancing, which is what matters
now," said Francisco Chavez, an analyst at BBVA Bancomer in
Monterrey-based Cemex, which bought Australia's Rinker in
2007 just as the U.S. housing crisis hit, is in urgent talks
with its creditors to refinance $14.5 billion in bank debt due
over the next three years. Its net debt was $18.3 billion at
the end of the second quarter.
Cemex, which operates in 50 countries and competes globally
with Switzerland's Holcim HOLN.VX and France's Lafarge
LAFP.PA, is asking creditors to give it until February 2014
to pay its bank debt.
The company did not give any updates on its debt talks in
its earnings statement.
Cemex agreed last month to sell its Australian operations to
Holcim at a fire-sale price of $1.6 billion, about half what it
paid in 2007.
But Cemex's efforts to sell its Austrian assets have faltered
after Vienna-listed Strabag (STRV.VI) this month pulled out of a
$435 million asset deal to buy Cemex units.
NOBODY BUYING CEMENT
Cemex, which last year had its Venezuelan assets
nationalized by socialist President Hugo Chavez, is facing some
of the most difficult times of its century-long life and
second-quarter sales reflected that.
Net sales in the United States fell 43 percent in the
quarter to $746 million compared to the same period a year ago.
Cement volumes there fell 37 percent.
Cemex said it had yet to see an improvement in construction
in the United States and around the world as the U.S. housing
crisis has yet to reach its lowest ebb.
"We have not yet seen the positive impact of (government)
stimulus packages around the world," the company said.
In Mexico, Cemex's second-largest market, cement sales
tumbled 21 percent to $853 million, as an outbreak of H1N1 flu
in the country shut down much of the economy in early May.
In Spain, another top market for Cemex and from where it
launched its global expansion in the 1990s, net sales for the
quarter were $221 million, down 54 percent from the second
quarter of 2008. Cement volumes fell 43 percent.
(Editing by Phil Berlowitz)