Bloomberg News

Cemex Advances Most in Month on Easing Default Concerns

November 29, 2011

(Updates prices in second paragraph.)

Nov. 28 (Bloomberg) -- Cemex SAB, the largest cement maker in the Americas, surged the most in a month on speculation the company will be able to meet the terms of a $15 billion loan.

The shares jumped 13.9 percent to 5.73 pesos in Mexico City trading, the steepest advance since Oct. 27.

Concern eased today that Europe’s debt crisis will deepen the slowdown in global economic growth, buoying Cemex after it posted its worst week since September. Investors are optimistic that a plan the company unveiled Oct. 26 to sell assets in the fourth quarter will help it meet year-end debt covenants, according to Carlos Hermosillo, an analyst with Grupo Financiero Banorte-Ixe.

“The anxiousness has cooled a bit,” Hermosillo said in a telephone interview from Mexico City. Cemex is benefitting from a “more optimistic environment today in the financial markets,” he said.

Cemex hasn’t had a profit in eight straight quarters. It posted a third-quarter net loss of $822 million, up from $89 million a year earlier.

The company, based in Monterrey, Mexico, will cut costs and increase efficiency, leading to a profit in its U.S. operations in 2012, chief communications and investment relations officer Maher Al-Haffar said Nov. 10 in a phone interview in Mexico City. The company’s U.S. operations posted negative earnings before interest, taxes, depreciation and amortization, a measure of cash flow known as Ebitda, in 2010 and the first three quarters of 2011.

--Editors: Glenn J. Kalinoski, David Papadopoulos

To contact the reporter on this story: Jonathan J. Levin in Mexico City at jlevin20@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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