New acquisitions boost Cementos de Chihuahua earnings at double-digit pace
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Grupo Cementos de Chihuahua (GCC) reported double-digit increases in sales and EBITDA in the third quarter of 2017 as result of a successful integration of the operations acquired in Texas and New Mexico late last year, favorable pricing environments in both the U.S. and Mexico, and solid progress in the execution of the company’s growth strategy.
Net sales totaled MXN 4,968 million (around US$ 258.7 million) in the three-month period ending September 30, 2017, a 15.9% increase compared to the same period of 2016.
Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled MXN 1,421 million or US$ 74 million, a 14.2% increase despite a lower profit margin of 28.6% (EBITDA/sales) compared to a 29.0% margin in the third quarter of 2017. However, consolidated net income totaled MXN 548 million or some US$ 28.5 million, an 8.8% decrease.
“We continue to be on track in terms of executing our business strategy. Our EBITDA margin in Mexico reached 40.8% – the highest in the last decade – and our U.S. margins reached 25.3%, the second highest since the Great Recession. We have completed the initial integration of the Odessa, Texas plant and other operations in Texas and New Mexico acquired last November. In addition, the expansion of the South Dakota plant is proceeding on schedule and GCC is continuing to make improvements in all our operations,” commented CEO Enrique Escalante in a conference call.
“We are also pleased that our leverage continues to come down faster than expected. We are ahead of schedule to meet our target of 2.0 times Net Debt/EBITDA ratio by the end of 2018,” Escalante added.