Cemex Posts $990 Million in Adjusted Operating Profit, Beating Third-Quarter Expectations
Key Facts
Cemex reported third-quarter results on October 26, with sales of $4.590 billion, up 8% year over year and 5% on a like-for-like basis. Earnings before interest, taxes, depreciation and amortization (EBITDA) reached $990 million, up 12%, while its margin widened to 21.6% from 20.8% a year earlier. The company also beat analysts’ estimates: adjusted earnings per American depositary receipt were $0.28, versus a consensus of $0.24, and revenue was $4.59 billion, compared with expectations of $4.45 billion. Shares rose 2.84% in premarket trading after the results were announced. CEO Jaime Muguiro said teams continued to execute the transformation plan despite volatility in the macroeconomic environment.
Adjusted operating profit grew faster than sales, and the margin expanded by 0.8 percentage points during the quarter. Cemex attributed the performance to the continued execution of its Project Cutting Edge program, higher prices and growth in aggregate volumes. For the first nine months, sales rose 10% to $13.203 billion, while EBITDA increased 22% to $2.802 billion. The margin for the period expanded to 21.2% from 19.2% in the year-earlier period. The nine-month figures show profit growth outpacing revenue growth, alongside a wider margin.
Cash flow strengthened the results: operating free cash flow was $723 million in the quarter, up 34% from a year earlier and a record for a third quarter. From the start of the year through September, it rose 194% to $1.4 billion. The cash conversion rate was 60% on a trailing 12-month basis through the end of the quarter. In Mexico, sales rose 16% to $1.299 billion, while adjusted operating profit jumped 30% to $480 million. Its margin also increased by 3.9 percentage points to 37.0%, making Mexico the strongest documented regional contributor to adjusted operating profit growth in the results.
Performance varied across the other regions. In Europe, the Middle East and Africa, adjusted operating profit rose 4% to $257 million, while the margin held at 17.9%. The company attributed the region’s growth to pricing strength and cost efficiencies, partly offset by higher energy costs. In South and Central America and the Caribbean, sales rose 12% to $333 million, but adjusted operating profit fell 5% to $62 million. The margin there declined to 18.6% from 21.9% a year earlier. In the United States, adjusted operating profit fell as the margin declined by 1.7 percentage points to 18.9%.
The company continued to streamline its asset portfolio under its restructuring program. It said estimated proceeds from divestitures since the initiative began last year had exceeded $200 million and included more than 140 facilities. During the quarter, it completed the sale of its ready-mix concrete and recycled concrete assets in the Atlanta market, alongside a long-term agreement to supply cement and admixtures to the buyer. It also began exclusive negotiations with Vicat Group to sell selected ready-mix concrete and aggregates assets in southeastern France. These moves follow the recurring savings target the company raised after its second-quarter results to $475 million. At the time, it said 80% of the original $400 million savings target had been achieved by the end of the second quarter, with most additional savings expected in 2027.
After its second-quarter results, Cemex raised its 2026 full-year adjusted operating profit growth forecast to 16%-17% year over year. On credit, S&P Global Ratings revised its outlook on the company to positive from stable on September 3 and affirmed its BBB- issuer rating. The agency estimated adjusted debt to adjusted operating profit at 2.5 times in the first half of 2026. It said a potential upgrade within 12-24 months would depend on the ratio remaining below 3 times and funds from operations to debt staying above 30% through industry cycles. The company’s calendar shows its fourth-quarter results announcement and presentation are scheduled for February 18, 2027.