Cemex SAB de CV (ADR)(NYSE:CX) reduced debt along with its increased profitability has helped the company to achieve a healthier balance sheet. It stated that the currency exposure is manageable provided the lucrative returns in the U.S. operations. Insufficient capacity for peers in Mexico has enabled company to regain a part of the industry share lost in recent times.

Markets are purchasing the firm’s strategy to minimize leverage and exposure to U.S. dollar. It seems now that markets are looking into company’s businesses, as it strategy to minimize debt have achieved positive results so far.

The highlights

Cemex has a long way to go in reducing its debt considering just 20% of its EBITDA is dollar-denominated and almost 80% of its debt exists in that same currency. The operations in the American market are showing signs of growth with EBITDA margins close to 15%. Dollar exposure continues to be a big concern for company.

In 2Q2016, interest expenses came at $343 million and EBITDA from the U.S. operations stood at $172 million. Considering 80% of the stated interest payments were paid in dollar and 20% of S,A&C EBITDA remains in U.S. dollar, the firm had an exposure of almost $45 million in the last quarter.

The plans

Cemex has delivered in terms of asset divestments and debt reduction; leverage ratios are declining led by higher profitability. The plan to minimize debt continued to yield results in the last quarter with Cemex Philippines IPO and a cash reserve of $270 million formed with the release of 8-year senior secured notes. As for asset sales, the company sold assets of its U.S. businesses to GCC worth $400 million.

Cemex’s balance sheet appears better now and a big credit of its goes to increasing profitability, especially from the U.S. businesses, and also from the debt reduction of 12% in last quarter.

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Steve Kanaval: Portfolio Manager/Writer/ Market Analyst Steve began his career in the Trading Pits in Chicago making markets at the Chicago Mercantile Exchange (NYSE:CME) the Chicago Board of Trade and the CBOE in the early 80’s. He ran the Morgan Stanley Derivative Prop Trading for the firm specializing in Index Arbitrage. He continued his career as a Trader/Portfolio Manager for multiple Hedge Funds during the Internet Boom of the 90’s managing large portfolios. Steve is known as an expert in MicroCap Technology Stocks and the emerging Digital Currency markets as a Portfolio Manager for his Family Office. Steve has managed portfolio’s in volatile asset classes for 3 decades as a commodity trader, hedge fund manager and digital currency trader and miner. Steve publishes his views on the asset classes in a public forum and has published more than 10,000 articles simplifying these complex and volatile assets for readers. His work is published on multiple sites including Bloomberg,,, CryptoCurrencyNews as a paid contributor. His work includes research, journalism and archived video on important market volatility related to stocks, digital currency and other volatile misunderstood asset classes. He offers a humorous, unique insight and the related back stories and drivers for readers interested in volatility and emerging market assets. Full disclosure Steve is long 25 digital currencies and sits on the board of multiple public companies involved in digital currencies, and owns shares in these companies from time to time.