"CEMEX, S.A. de C.V. (NYSE: CX) announced today that its consolidated net sales for the first quarter of 2005 were USD2.6 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 USD1,956 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 USD296 million. EBITDA (operating income plus depreciation and amortization) grew 14% to USD633 million. Excluding the effect of the consolidation of RMC, EBITDA for the quarter was USD583 million, 5% higher than a year ago.
Operating income for the quarter was USD440 million, up 12% over the same period of 2004. Excluding the effect of RMC, operating income grew 6% to USD417 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 USD444 million versus USD311 million a year ago. Excluding the effect of the consolidation of RMC, majority net income grew 35% to USD421 million. This increase is due to strong consolidated operating performance and to gains resulting from our derivative positions."