July 26, 2018 / 11:11 AM / 3 months ago

UPDATE 2-Mexico's Cemex shares rise on profit beat, dividend plan

(Adds shares, comments from the call)

MEXICO CITY, July 26 (Reuters) - Mexican cement company Cemex posted better-than-expected results on Thursday and said it would return capital to shareholders, sending the company’s stock up more than 5 percent.

Cemex, which lost its investment-grade credit rating almost a decade ago, said net profit was $382 million in the three months to the end of June, up from $288 million a year ago.

That beat analyst expectations of $235 million in a Reuters poll earlier this month.

The company said it would return cash to shareholders through an annual cash dividend, starting with $150 million in 2019. It also announced cost cuts and asset sales to help it meet investment grade metrics faster.

Shares in Cemex were up 5.22 percent at 13.92 pesos in mid-morning trading.

On a like-for-like basis adjusting for exchange rate fluctuations, revenue was $3.8 billion, the company said.

In a statement to the Mexican stock exchange, Cemex added that it planned to sell between $1.5 billion and $2 billion worth of assets and make $150 million of cost savings. It will also try to reduce total debt by $3.5 billion by the end of 2020.

The company said the plan would mean that by the end of 2020 it will meet the metrics for an investment-grade credit rating.

Monterrey-based Cemex abandoned a capital-raising plan in March, and was also told it was facing a U.S. Department of Justice investigation into its operations in Colombia and other jurisdictions. (Reporting by Christine Murray and Noe Torres; editing by Jason Neely and Kirsten Donovan)

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