MEXICO CITY (Reuters) - Mexican cement producer Cemex SAB de CV (CEMEXCPO.MX) on Wednesday reported a bigger quarterly loss as sales fell in all its markets except the United States, triggering a sharp drop in its shares.
The company’s net loss widened to $238 million in the fourth quarter, from $37 million a year earlier, while total net sales were flat at $3.3 billion. Shares of Cemex were trading down nearly 5% in late-morning trading on the local stock exchange.
On a call with investors, Cemex said it would not pay a dividend this year as it seeks to reduce its debt as part of an ongoing campaign to regain its investment-grade rating.
After a difficult economic landscape in 2019, Cemex executives said they expect neutral economic conditions this year.
“We are cautiously optimistic about the outlook for 2020, with expected improved market conditions in our two main markets, Mexico and the U.S.,” Cemex Chief Executive Fernando Gonzalez said in a statement.
In Mexico, Cemex’s home market, cement volumes fell 13%, amid market caution at the start of the administration of Mexican President Andres Manuel Lopez Obrador.
“Performance during the year was affected by muted public and private investment in a government-transition year and by delays and suspensions of building permits in Mexico City,” the company said in a report accompanying its results.
The Monterrey-based company said it was also hurt by the Mexican peso’s fluctuation against the U.S. dollar.
Despite the widening loss, investment bank Barclays wrote in a note to investors that Cemex’s results were in line with expectations or slightly better, citing improvements in South and Central America as well as the Caribbean.
Colombia-based subsidiary Cemex Latam Holdings CLH.CN said in a regulatory filing its net profit sank 93% to $4 million in 2019 compared with the year before, due to a fall in sales and the depreciation of the Colombian peso.
CLH said net sales were down 11% last year to $989 million, amid weak markets in Panama, Costa Rica and Nicaragua.
During the fourth quarter, CLH recorded a net loss of $3 million, compared to a net profit of $9 million in the same period of 2018.
The company said it had refinanced debts which were set to come due this year, delaying significant loan payment deadlines until the end of 2022.
Reporting by Julia Love and Abraham Gonzalez in Mexico City; additional reporting by Nelson Bocanegra in Bogota and Ankit Ajmera in Bengaluru; Editing by Bernadette Baum and Nick Zieminski