EX-99.1 2 d742992dex991.htm FIRST QUARTER 2019 RESULTS FOR CEMEX HOLDINGS PHILIPPINES, INC

First quarter 2019 results for CEMEX Holdings Philippines, Inc

Exhibit 1

Exhibit 1 Cemex holding philippines 2019 FIRST QUARTER RESULTS â–ª Stock Listing Information Philippine Stock Exchange Ticker: CHP â–ª Investor Relations + 632 849 3600 E-Mail: chp.ir@cemex.com

January—March First Quarter 20192018% var 20192018% var Net sales 6,2375,8916%6,2375,8916% Gross profit2,3132,466(6%)2,3132,466(6%) as % of net sales37%42%(5pp)37%42%(5pp) Operating earnings before other expenses, net6255935%6255935% as % of net sales10%10%0 pp10%10%0 pp Controlling interest net income (loss)16969145%16969145% Operating EBITDA1,0961,0217%1,0961,0217% as % of net sales18%17%1 pp18%17%1 pp Free Cash Flow after maintenance capital expenditures848858(1%)848858(1%) Free Cash Flow 7837435%7837435% Net debt115,14613,47612%15,14613,47612% Total debt119,03115,32724%19,03115,32724% Earnings per share20.030.01145%0.030.01145%    In millions of Philippine Pesos, except percentages and earnings per share 1 U.S. dollar debt converted using end-of-period exchange rate. See Debt Information on page 4 and Exchange Rates on page 8 for more detail. 2 In Philippine Pesos    Net sales increased by 6% year-over-year during the quarter due to higher prices, a result of price adjustments implemented during 2018. Cost of sales was at 63% of sales during the quarter versus 58% in the same period of 2018. The increase was mainly due to scheduled kiln maintenance in Solid Cement plant, and cement imports and outsourced clinker carried over resulting from the Naga landslide incident. Fuel costs accounted for 18% of cost of sales, a decrease of 9 pp year-over-year due to use of hedged coal inventory and Solid kiln maintenance. Power costs accounted for 18% of cost of sales, a decrease of 4 pp year-over-year resulting from more competitive contracted power rates and lower power consumption. Operating expenses, as a percentage of sales, during the quarter decreased by 5 pp compared to the same period in 2018. Distribution expenses, as a percentage of sales, decreased by 4 pp year-over-year mainly due to supply-chain-optimization initiatives, and higher sales from cement imports carried over resulting from the Naga landslide incident. Selling and administrative expenses, as a percentage of sales, decreased by 1 pp year-over-year.    Operating EBITDA during the quarter increased by 7% year-over-year due to savings in distribution expenses, while increased cost of sales were mitigated by higher year-over-year prices. Operating EBITDA margin during the quarter was slightly higher year-over-year at 18%. Controlling interest net income for the quarter was 145% higher year-over-year at PHP 169 million mainly due to lower foreign-exchange losses and higher operating earnings. Total debt at the end of March 2019 stood at PHP 19,031 million, of which PHP 13,232 million pertained to long-term debt owed to BDO Unibank, Inc.    2019 First Quarter Results    Page 2

Operating Results                Domestic Gray Cement January—March First Quarter First Quarter 2019 2019 vs. 2018 2019 vs. 2018 vs. Fourth Quarter 2018 Volume (1%) (1%) 9% Price in PHP 7% 7% 4% Our domestic cement volumes decreased by 1% year-over-year during the quarter as sales volumes were still recovering at the start of the year from the impact of the September 2018 landslide in Naga City, Cebu, near our APO plant. Sales volumes, however, increased throughout the quarter, reaching an all-time high in monthly sales volume during March. Industry growth was driven by a strong residential sector and sustained public infrastructure spending. Our domestic cement prices were 4% higher sequentially during the quarter, reflecting a consolidation of price adjustments implemented in December 2018 due to the impact of the landslide. Product mix effect also positively affected weighted-average prices, as well as a low base of comparison from the first two months of 4Q18. Our domestic cement prices were 7% higher year-over-year, a result of price adjustments implemented during 2018.    2019 First Quarter Results    Page 3

Operating EBITDA, Free Cash Flow and Debt Information    Operating EBITDA and Free Cash Flow         January—MarchFirst Quarter 20192018% var 20192018% var Operating earnings before other expenses, net6255935%6255935% + Depreciation and operating amortization471429471429 EBITDA1,0961,0217%1,0961,0217%—Net Financial Expense355249355249—Maintenance CAPEX90809080—Change in Working Capital(283)(266)(283)(266)—Taxes Paid9210492104—Other Cash Items (net)(6)(2)(6)(2) Free Cash Flow after maintenance capital expenditures848858(1%)848858(1%)—Strategic CAPEX6511465114 Free Cash Flow7837435%7837435% In millions of Philippine Pesos    Debt Information Fourth First Quarter Quarter First Quarter 2019 2018 % var 2018 2019 2018 1 19,031 15,327 24% 17,377 Currency denomination Total debt                Short term 6% 3% 7%                U.S. dollar 25% 2%                Long term 94% 97% 93%                Philippine peso 75% 98% Cash and cash equivalents 3,885 1,851 110% 1,814 Interest rate Net debt 15,146 13,476 12% 15,563                Fixed 35% 43%                Variable 65% 57% In millions of Philippine Pesos, except percentages 1 U.S. dollar debt converted using end-of-period exchange rate. See Exchange Rates on page 8 for more detail.    2019 First Quarter Results    Page 4

Financial Results                Income Statement & Balance Sheet Information CEMEX Holdings Philippines, Inc. (Thousands of Philippine Pesos in nominal terms, except per share amounts)                January—March First Quarter INCOME STATEMENT 2019 2018 % Var. 2019 2018 % Var. Net sales 6,237,427 5,891,259 6% 6,237,427 5,891,259 6% Cost of sales (3,924,246) (3,425,635) (15%) (3,924,246) (3,425,635) (15%) Gross profit 2,313,181 2,465,624 (6%) 2,313,181 2,465,624 (6%) Selling and Administrative expenses (735,596) (744,981) 1% (735,596) (744,981) 1% Distribution expenses (952,950) (1,128,106) 16% (952,950) (1,128,106) 16% Operating earnings before other expenses, net 624,635 592,537 5% 624,635 592,537 5% Other income (expenses), net 6,392 2,276 181% 6,392 2,276 181% Operating earnings 631,027 594,813 6% 631,027 594,813 6%    Financial expenses, net (355,236) (248,699) (43%) (355,236) (248,699) (43%)    Foreign exchange gain (loss), net (17,276) (287,440) 94% (17,276) (287,440) 94% Net income (loss) before income tax 258,515 58,674 341% 258,515 58,674 341%    Income tax (expense) benefit (89,876) 10,260 N/A (89,876) 10,260 N/A Consolidated net income (loss) 168,639 68,934 145% 168,639 68,934 145% Non-controlling interest net loss 7 10 (30%) 7 10 (30%) Controlling interest net income (loss) 168,646 68,944 145% 168,646 68,944 145% Operating EBITDA 1,095,935 1,021,402 7% 1,095,935 1,021,402 7% Earnings (loss) of continued operations per share 0.03                 0.01 145% 0.03                 0.01 145%         As of March 31As of December BALANCE SHEET20192018% Var 2018% Var Total assets 59,890,67255,345,7858%58,058,7693% Cash and cash equivalents3,885,2681,850,878110%1,813,665114% Derivative asset17,020012,87532% Trade Accounts Receivables1,082,287986,25310%708,90653% Other Receivables90,122357,001(75%)103,396(13%) Insurance Claims and Premium Receivables 638,4660949,983(33%) Inventories3,447,2272,692,51028%3,488,178(1%) Assets held for sale0111,3480 Other Current Assets1,551,9201,606,962(3%)1,677,670(7%) Current assets10,712,3107,604,95241%8,754,67322% Fixed Assets17,472,77917,936,305(3%)17,768,023(2%) Investments in an Associate and Other Investments 14,09715,407(9%)14,0970% Other Assets and Noncurrent Accounts Receivables974,819724,87034%818,24719% Advances to Contractors2,069,60102,069,6010% Deferred Income Taxes—net787,3721,204,557(35%)774,4342% Goodwill27,859,69427,859,6940%27,859,6940% Other assets31,705,58329,804,5286%31,536,0731% Total liabilities30,985,90825,753,98220%29,332,8036% Current Liabilities10,651,6657,753,41837%10,534,0451% Long-Term Liabilities17,657,64314,681,20420%16,009,64210% Deferred Tax Liability129,65956,279130%147,387(12%) Other Liabilities 2,546,9413,263,081(22%)2,641,729(4%) Total stockholders’ equity28,904,76529,591,803(2%)28,725,9661% Non-controlling interest186212(12%)193(4%) Stockholders’ Equity Attributable to Controlling Interest28,904,57929,591,591(2%)28,725,7731% 2019 First Quarter Results    Page 5

Financial Results                Income Statement & Balance Sheet Information CEMEX Holdings Philippines, Inc. (Thousands of U.S. Dollars, except per share amounts)         January—MarchFirst Quarter INCOME STATEMENT20192018% Var.20192018% Var. Net sales119,705113,6185%119,705113,6185% Cost of sales(75,312)(66,066)(14%)(75,312)(66,066)(14%) Gross profit44,39347,552(7%)44,39347,552(7%) Selling and Administrative expenses(14,117)(14,369)2%(14,117)(14,369)2% Distribution expenses(18,288)(21,756)16%(18,288)(21,756)16% Operating earnings before other expenses, net11,98811,4275%11,98811,4275% Other income (expenses), net 12344180%12344180% Operating earnings12,11111,4716%12,11111,4716% Financial income (expense), net(6,817)(4,796)(42%)(6,817)(4,796)(42%) Foreign exchange gain (loss), net (332)(5,544)94%(332)(5,544)94% Net income (loss) before income tax4,9621,131339%4,9621,131339% Income tax (expense) benefit(1,725)198N/A(1,725)198N/A Consolidated net income (loss)3,2371,329144%3,2371,329144% Non-controlling interest net loss0000 Controlling interest net income (loss)3,2371,329144%3,2371,329144% Operating EBITDA21,03319,6997%21,03319,6997% Earnings (loss) of continued operations per share---- As of March 31As of December 31 BALANCE SHEET20192018% Var 2018% Var Total assets1,140,7751,061,0778%1,104,1993% Cash and cash equivalents74,00535,485109%34,493115% Derivative Asset324024532% Trade Accounts Receivables20,61518,9089%13,48253% Other Receivables1,7176,844(75%)1,966(13%) Insurance Claims and Premium Receivables 12,161018,067(33%) Inventories65,66151,62027%66,340(1%) Assets Held for Sale02,1350 Other Current Assets29,56030,808(4%)31,907(7%) Current Assets204,044145,80040%166,50223% Fixed Assets332,815343,871(3%)337,924(2%) Investments in an Associate and Other Investments 269295(9%)2680% Other Assets and Noncurrent Accounts Receivables18,56813,89734%15,56219% Advances to Contractors39,421039,3610% Deferred Income Taxes—net14,99823,094(35%)14,7292% Goodwill530,661534,120(1%)529,8530% Other Assets603,916571,4066%599,7731% Total Liabilities590,208493,75020%557,8706% Current liabilities202,889148,64736%200,3431% Long-Term Liabilities336,336281,46519%304,48210% Deferred Tax Liability2,4701,079129%2,803(12%) Other Liabilities 48,51362,559(22%)50,242(3%) Consolidated Stockholders’ Equity550,567567,328(3%)546,3291% Non-controlling Interest44(13%)4(3%) Stockholders’ Equity Attributable to Controlling Interest550,563567,323(3%)546,3251%    2019 First Quarter Results    Page 6

Other Information                Newly issued PFRS effective in 2019 PFRS 16, Leases (“PFRS 16”)    In summary, beginning January 1, 2019, PFRS 16 introduces a single lessee accounting model and requires a lessee to recognize, for all leases, allowing exemptions in case of leases with a term of less than 12 months or when the underlying asset is of low value, assets for the right-of-use of the underlying asset against a corresponding financial liability, representing the net present value of estimated lease payments under the contract, with a single income statement model in which a lessee recognizes amortization of the right-of-use asset and interest on the lease liability. After concluding the inventory and measurement of its leases, CEMEX Holdings Philippines, Inc. and Subsidiaries adopted PFRS 16 using the full retrospective approach by means of which it determined an opening cumulative effect in its statement of financial position as of January 1, 2018 as follows:    (Thousands of Philippine Pesos)    As of January 1, 2018 Assets for the right-of-use 2,167,178 Deferred income tax assets1,067,565 Deferred income tax liability(92,674) Lease liabilities2,318,299 Retained earnings 11,951,819 1 The initial effect in retained earnings refers to a temporary difference between the straight-line amortization expense of the right-of-use asset and the amortization of the financial liability under the effective interest rate method since origination of the contracts. This difference will reverse over the remaining term of the contracts. CEMEX Holdings Philippines, Inc. and Subsidiaries modified the previously reported income statement for the three-month period ended March 31, 2018 to give effect to the retrospective adoption of PFRS 16, as follows:    SELECTED INFORMATION INCOME STATEMENTAs originally reportedAs modified FirstJan-MarFirst (Thousands of Philippine Pesos)Jan-MarQuarterQuarter Revenues 5,891,2595,891,2595,891,2595,891,259 Cost of sales(3,445,425)(3,445,425)(3,425,635)(3,425,635) Operating expenses(1,889,136)(1,889,136)(1,873,087)(1,873,087) Other expenses, net2,2762,2762,2762,276 Financial (income) expense and others, net(455,528)(455,528)(536,139)(536,139) Earnings before income tax103,446103,44658,67458,674 Income tax(3,164)(3,164)10,26010,260 Earnings from continuing operations 100,282100,28268,94468,944    As of March 31, 2019 and December 31, 2018, assets for the right-of-use amounted to PHP 2,039.4 million and PHP 2,150.7 million, respectively. In addition, financial liabilities related to lease contracts amounted to PHP 2,250.6 million as of March 31, 2019 and PHP 2,359.6 million as of December 31, 2018 and were included within “Debt and other financial liabilities.” 2019 First Quarter Results    Page 7

Definitions of Terms and Disclosures    Methodology for translation, consolidation, and presentation of results CEMEX Holdings Philippines, Inc. (“CHP”) reports its consolidated financial statements under Philippine Financial Reporting Standards (“PFRS”). When reference is made in 2019 and 2018 to consolidated financial statements, it means CHP financial information together with its subsidiaries.    For the purpose of presenting figures in U.S. dollars, the consolidated balance sheet as of March 31, 2019 has been converted at the end of period exchange rate of 52.50 Philippine pesos per US dollar while the consolidated income statement for the three-month period ended March 31, 2019 has been converted at the January to March 2019 average exchange rate of 52.11 Philippine pesos per US dollar.    Definition of terms PHP refers to Philippine Pesos. pp equals percentage points. Prices all references to pricing initiatives, price increases or decreases, refer to our prices for our products. Operating EBITDA equals operating earnings before other expenses, net, plus depreciation and operating amortization. Free cash flow equals operating EBITDA minus net interest expense, maintenance and strategic capital expenditures, change in working capital, taxes paid, and other cash items (net other expenses less proceeds from the disposal of obsolete and/or substantially depleted operating fixed assets that are no longer in operation). Maintenance capital expenditures investments incurred for the purpose of ensuring the company’s operational continuity. These include capital expenditures on projects required to replace obsolete assets or maintain current operational levels, and mandatory capital expenditures, which are projects required to comply with governmental regulations or company policies. Strategic capital expenditures investments incurred with the purpose of increasing the company’s profitability. These include capital expenditures on projects designed to increase profitability by expanding capacity, and margin improvement capital expenditures, which are projects designed to increase profitability by reducing costs. Change in Working capital in the Free cash flow statements only include trade receivables, trade payables, receivables and payables from and to related parties, other current receivables, inventories, other current assets, and other accounts payable and accrued expense. Net debt equals total debt minus cash and cash equivalents.    Exchange Rates January—March First Quarter January—March 2019 2018 2019 2018 2019 2018 average average average average End of period End of period Philippine peso 52.11 51.85 52.11 51.85 52.50 52.16 Amounts provided in units of local currency per US dollar 2019 First Quarter Results    Page 8