================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
_______________________
Date of Report: July 24, 2003
CEMEX, S.A. de C.V.
(Exact name of Registrant as specified in its charter)
CEMEX Corp.
(Translation of Registrant's name into English)
United Mexican States
(Jurisdiction of incorporation or organization)
Av. Ricardo Margain Zozaya #325, Colonia del Valle Campestre
Garza Garcia, Nuevo Leon, Mexico 64000
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F |X| Form 40-F ___
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes ____ No |X|
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b):
N/A
===============================================================================
===============================================================================
Contents
1. Press release announcing CEMEX's results for the second quarter of 2003
(attached hereto as exhibit 1).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
CEMEX, S.A. de C.V. has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
CEMEX, S.A. de C.V.
-------------------------
(Registrant)
Date: July 24, 2003 By: /s/ Rafael Garza
----------------- -------------------------
Name: Rafael Garza
Title: Chief Comptroller
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1 Press release announcing CEMEX's results for
the second quarter of 2003
EXHIBIT 1
CEMEX 2003
SECOND QUARTER RESULTS
- ------------------------------------------------------------------------------
Second quarter Second quarter
--------------- ---------------
2003 2002 % Var. 2003 2002
- -------------------------------------------------------------------------------
Net Sales 1,855 1,742 7% % of Net Sales
- -------------------------------------------------------------------------------
Gross Profit 787 795 (1%) 42.4% 45.7%
- -------------------------------------------------------------------------------
Operating Income 390 403 (3%) 21.0% 23.2%
- -------------------------------------------------------------------------------
Majority net income 309 73 322% 16.7% 4.2%
- -------------------------------------------------------------------------------
EBITDA 552 555 (1%) 29.8% 31.9%
- -------------------------------------------------------------------------------
Free cash flow 390 378 3%
- -------------------------------------------------------------------------------
- ---------------------------------------------------
Net debt 5,829 6,027 (3%)
- ---------------------------------------------------
Net debt/EBITDA 3.0 2.9
- ---------------------------------------------------
Interest coverage 4.9 5.3
- ---------------------------------------------------
Earnings per ADR 1.00 0.25 300%
- ---------------------------------------------------
Average ADRs outstanding 309.2 295.8 4.5%
- ---------------------------------------------------
In millions of U.S. dollars, except ratios and per-ADR amounts.
Average ADRs outstanding presented in millions of ADRs.
CONSOLIDATED NET SALES increased 7% from the second quarter of 2002 to
US$1,855 million. The increase in sales was primarily due to the positive
contribution of our newly acquired Puerto Rican unit, and to our higher sales
in Mexico, Spain and Venezuela.
COST OF GOODS SOLD as a percentage of net sales increased by 3.3 percentage
points versus the year-earlier period, mainly due to the change in our sales
mix, as we had higher sales from our multi-products strategy and ready-mix in
Mexico, as well as higher energy costs.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A) increased 1% versus the
second quarter of 2002. As a percentage of sales, SG&A decreased 110 basis
points versus the second quarter of 2002 and 150 basis points for the first
half of the year versus the comparable period in 2002. The reduced SG&A margin
is due to our continuing efforts to reduce overhead at the corporate and plant
levels.
EBITDA dropped 1% from a year ago to US$552 million, and our consolidated
EBITDA margin decreased from 32% in the year-earlier period to 30% in the
second quarter of 2003. The two percentage-point drop is attributable to the
increased weight of our multi-products and ready mix sales - both of which
have lower margins than cement sales, as well as higher energy costs with
stable average prices.
FOREIGN EXCHANGE GAIN (LOSS) for the quarter was a gain of US$48 million,
versus a loss of US$107 million in the year-earlier period. The foreign
exchange gain was primarily due to the appreciation of the Mexican peso and
depreciation of the yen versus the U.S. dollar during the quarter.
MARKETABLE SECURITIES GAIN (LOSS) for the quarter was a gain of US$66 million,
versus a loss of US$122 million in the year-earlier period. The gain is
explained by the increase in value of our derivatives position (mainly our
equity forward contracts designed to hedge our stock option plans), which
improved by US$347 million during the quarter, and a portion of which needs to
be recognized through our income statement.
MAJORITY NET INCOME for the quarter was US$309 million, an increase of 322%
versus the second quarter of 2002. The increase is mainly due to gains in
foreign exchange and marketable securities, whereas in the second quarter of
2002 these items represented a loss (explained above).
NET DEBT at the end of the second quarter was US$5,829 million, versus $6,179
million at the end of the first quarter of 2003. Free cash flow in the amount
of US$388 million was used to reduce net debt during the quarter; however,
when expressed in U.S. dollars, net debt decreased by US$350 due to the
strengthening of the euro versus the U.S. dollar.
- ------------------------------------------------------------------------------
Please refer to the end of this report for definition Page 1
of terms, U.S. dollar translation methodology and
other important disclosures.
CEMEX logo
[GRAPHIC OMITTED]
EBITDA & FREE CASH FLOW
=======================================================================================================
Second quarter January-June
-------------- -------------
2003 2002 % Var. 2003 2002 % Var.
- ------------------------------------------------------------------------------------------------------
Operating income 390 403 (3%) 698 714 (2%)
- ------------------------------------------------------------------------------------------------------
+ Depreciation and operating amortization 162 152 315 300
- ------------------------------------------------------------------------------------------------------
EBITDA 552 555 (1%) 1,013 1,014 (0%)
- ------------------------------------------------------------------------------------------------------
- - Net financial expense 93 69 179 130
- ------------------------------------------------------------------------------------------------------
- - Capital expenditures 82 104 167 178
- ------------------------------------------------------------------------------------------------------
- - Change in working capital (50) (75) 86 86
- ------------------------------------------------------------------------------------------------------
- - Taxes paid 26 61 44 110
- ------------------------------------------------------------------------------------------------------
- - Preferred dividend payments 6 9 15 21
- ------------------------------------------------------------------------------------------------------
- - Other cash items 5 9 25 36
- ------------------------------------------------------------------------------------------------------
Free cash flow 390 378 3% 497 453 10%
- ------------------------------------------------------------------------------------------------------
In millions of U.S. dollars.
During the quarter, US$390 million of free cash flow was used primarily to
reduce net debt, however net debt was reduced by US$350 million during the
quarter as a result of foreign exchange rates movements in the amount of US$38
million. Free cash flow was also used to pay dividends in the amount of US$6
million.
EBITDA and free cash flow (calculated as set forth above) are presented herein
because CEMEX believes that they are widely accepted as financial indicators
of its ability to internally fund capital expenditures and service or incur
debt. EBITDA and free cash flow should not be considered as indicators of
CEMEX's financial performance, as alternatives to cash flow, as measures of
liquidity or as being comparable to other similarly titled measures of other
companies. EBITDA is reconciled above to operating income which CEMEX
considers to be the most comparable measure as determined under generally
accepted accounting principles in Mexico (GAAP). Free cash flow is reconciled
to EBITDA. CEMEX is not required to prepare a statement of cash flows under
Mexican accounting principles and, as such does not have such GAAP cash flow
measures to present as comparable to EBITDA or free cash flow.
DEBT RELATED INFORMATION
=======================================================================================================================
Second quarter First quarter Second quarter
-------------- ------------- --------------
2003 2002 % Var. 2003 2003 2002
- -------------------------------------------------------------------- ------------------------------------------
Total debt 5,824 5,781 1% 5,818 Currency denomination
- --------------------------------------------------------------------
Short term 34% 19% 30%
- -------------------------------------------------------------------- ------------------------------------------
Long term 66% 81% 70% U.S. Dollar 75% 76%
- -------------------------------------------------------------------- ------------------------------------------
Equity obligations 716 716 0% 716 Japanese Yen 13% 13%
- -------------------------------------------------------------------- ------------------------------------------
Cash & cash equivalents 711 470 51% 355 Euro 11% 10%
- -------------------------------------------------------------------- ------------------------------------------
Net debt 5,829 6,027 (3%) 6,179 Other 1% 1%
- -------------------------------------------------------------------- ------------------------------------------
- --------------------------------------------------------------------
Interest expense 96 83 92 Interest rate
- --------------------------------------------------------------------
Preferred dividends 6 9 9
- -------------------------------------------------------------------- ------------------------------------------
Interest coverage 4.9 5.3 5.0 Fixed 69% 30%
- -------------------------------------------------------------------- ------------------------------------------
Net debt/EBITDA 3.0 2.9 3.2 Variable 31% 38%
- -------------------------------------------------------------------- ------------------------------------------
Capitalization ratio 46.9% 45.6% 48.7% Fixed deferred 0% 32%
- -------------------------------------------------------------------- ------------------------------------------
In millions of U.S. dollars, except ratios.
OTHER DEVELOPMENTS
On June 30, 2003, CEMEX issued two tranches under its Medium-Term Promissory
Notes Program ("Certificados Bursatiles"). The first tranche of notes consists
of MXP 1,600 million with a maturity of three years at an interest rate equal
to the Mexican peso Interbank Offer Rate (TIIE) plus 80 basis points. The
second tranche of notes consists of five and a half years MXP 545 million
tranche in UDIs ("Unidades de inversion") at an interest rate of 5.30%.
During June 2003, CEMEX Espana, through a wholly-owned subsidiary, closed a
seven, ten and twelve-year US$400 million private placement mainly with
insurance companies and pension funds in the United States.
- ------------------------------------------------------------------------------
Please refer to the end of this report for definition Page 2
of terms, U.S. dollar translation methodology and
other important disclosures.
CEMEX logo
[GRAPHIC OMITTED]
EQUITY RELATED INFORMATION
==============================================================================
One CEMEX ADR represents five CEMEX CPOs. The following amounts are expressed
in CPO terms
Beginning of quarter CPO-equivalent units outstanding 1,520,783,863
- -----------------------------------------------------------------------------
CPOs issued due to stock dividend 98,841,944
Net effect of share repurchase program 4,290,500
Exercise of stock options not hedged 138,918
Change in the number of CPOs held in subsidiaries (8,743,886)
End of quarter CPO-equivalent units outstanding 1,615,311,339
- -----------------------------------------------------------------------------
Outstanding units equal total shares issued by CEMEX less
shares held in subsidiaries.
Employee stock options plans
As of June 30, 2003, directors, officers and other employees under our
employee stock options plans had outstanding options to acquire 176,034,750
CEMEX CPOs. Of the total options outstanding, 95.4% are hedged through equity
forward agreements, and will not dilute existing shares when exercised. The
total amount of these options programs represents 10.9% of total CPOs
outstanding.
DERIVATIVE INSTRUMENTS
==============================================================================
CEMEX periodically utilizes derivative financial instruments such as interest
rate and currency swaps, currency and equity forward contracts, options and
futures in order to achieve our funding strategy and to hedge our stock
options plans and other equity related obligations.
The following table shows the notional amount for each type of derivative
instrument, and the aggregate fair market value for all of CEMEX's derivative
instruments as of the last day of each quarter presented.
Second quarter First quarter
-------------- -------------
Notional amounts 2003 2002 2003
- --------------------------------------------------------------------------------
Equity * 1,544 1,400 1,500
Foreign Exchange 3,290 3,119 2,750
Interest Rate 3,576 4,644 3,576
- --------------------------------------------------------------------------------
Estimated aggregate fair market value (223) (61) (570)
- --------------------------------------------------------------------------------
In millions of U.S. dollars.
The estimated aggregate fair market value represents the approximate
settlement result as of the valuation date, based upon quoted market prices
and estimated settlement costs, which fluctuate over time. Fair market values
and notional amounts do not represent amounts of cash currently exchanged
between the parties; cash amounts will be determined upon termination of the
contracts considering the notional amounts, quoted market prices, as well as
the other derivative items as of the settlement date. Fair market values
should not be viewed in isolation, but rather in relation to the fair values
of the underlying hedge transactions and the overall reduction in the
company's exposure to the risks being hedged.
* The aggregate weighted average exercise price on June 30, 2003 for CEMEX's
outstanding stock options, warrants and the CAH obligation was US$24.36 per
ADR. On that same date, the aggregate weighted average strike price of CEMEX's
equity forward agreements put in place to hedge our obligations under the
abovementioned stock options was US$21.96 per ADR.
Under Mexican GAAP ("Bulletin C-2"), companies are required to recognize all
derivative financial instruments in the balance sheet as assets or
liabilities, at their estimated fair market value, with changes in such fair
values recorded on the income statement. The exceptions to the rule, as they
refer to CEMEX, are presented when transactions are entered for hedging
purposes. In such cases, the related derivative financial instruments should
be valued using the same valuation criteria applied to the hedged asset,
liability or equity instrument. CEMEX has recognized increases in assets and
liabilities, which resulted in a net liability of US$592 million, arising from
the fair value recognition of its derivatives portfolio as of June 30, 2003.
The notional amounts of derivatives substantially match the amounts of
underlying assets, liabilities or equity transactions on which the derivatives
are being entered into.
- ------------------------------------------------------------------------------
Please refer to the end of this report for definition Page 3
of terms, U.S. dollar translation methodology and
other important disclosures.
CEMEX logo
[GRAPHIC OMITTED]
OTHER ACTIVITIES
==============================================================================
98% of shareholders receive CPOs under CEMEX's stock dividend program
On June 5, 2003, CEMEX announced the completion of its stock dividend program.
A total of 98,841,944 CPOs were issued on June 5, 2003 and distributed to 98%
of shareholders. The remaining 2% of shareholders elected to receive a cash
payment of MXP 2.20 per CPO (MXP 11.00 per ADS) in lieu of the stock, for a
total of approximately MXP 61 million (US$6 million) paid by CEMEX.
Under this dividend program, CEMEX shareholders electing to receive stock
received one new CPO for each 16.568 CPOs held (each representing two series A
shares and one series B share). CEMEX shareholders had the option to receive a
cash payment of MXP 2.20 per CPO in lieu of the stock dividend.
CEMEX plans to increase production capacity in the Dominican Republic
Cementos Nacionales, our main operating subsidiary in the Dominican Republic,
has initiated a US$130 million investment plan for installing a new kiln for
producing clinker with annual capacity of 1.6 million metric tons of clinker.
This investment would increase our total clinker production capacity in the
Dominican Republic to 2.2 million tons per year. The new kiln is expected to
be completed in early 2005. We expect to invest approximately US$16 million to
this project in 2003, with the remaining of the investment expected to be
realized during 2004 and 2005.
- ------------------------------------------------------------------------------
Please refer to the end of this report for definition Page 4
of terms, U.S. dollar translation methodology and
other important disclosures.
CEMEX logo
[GRAPHIC OMITTED]
OPERATING RESULTS - MEXICO
===============================================================================
In Mexico, net sales were US$714 million, an increase of 9% versus the second
quarter of 2002.
Domestic gray cement volume increased 2% versus the year-earlier period, while
ready-mix volume increased 10%. The residential sector and infrastructure
projects continue to be the main drivers of cement and ready-mix demand in
Mexico. The self-construction sector - which represents about half of cement
demand in Mexico - remains stable.
CEMEX's average realized gray cement price in Mexico increased 2% in constant
pesos versus the second quarter of 2002, and decreased 1% in dollar terms. The
average ready-mix price decreased 3% in constant pesos and decreased 5% in
dollar terms compared with the second quarter of 2002.
The average cash cost of goods sold per metric ton increased 4% in dollar
terms versus the second quarter of 2002, mostly due to increased energy costs.
UNITED STATES
===============================================================================
Net sales for CEMEX's U.S. operations during the second quarter were US$452
million, a decrease of 6% compared to the year-earlier period.
Domestic cement volume decreased 3% during the second quarter of 2003 compared
to the year-earlier period, while the ready-mix volume increased 9%. The
residential sector is still strong; however, lower spending on infrastructure
and highways coupled with lower construction in the industrial and commercial
sector drove down cement demand during the quarter. Weather continues to be a
factor with significant influence over cement demand activity as heavy
rainfall throughout our markets had an impact on our cement sales volumes.
Ready mix volume was driven mainly by strong sales in the western U.S.
The average realized cement price decreased 2% versus the second quarter of
2002 and remained flat versus the first quarter of 2003, while the average
ready-mix price remained flat versus the same period a year ago, and also
versus the first quarter of 2003.
The average cash cost of goods sold per metric ton increased 1% versus the
second quarter of 2002.
SPAIN
==============================================================================
Net sales for CEMEX Spain during the quarter were US$291 million, an increase
of 22% versus the year-earlier period. Domestic cement volume increased 7%
during the quarter compared to the same period a year ago. Ready-mix volume
increased 5% for the quarter versus the year-earlier period. Spain's
infrastructure program, together with a low interest rate environment, has
strengthened cement and ready mix demand in the country.
The average domestic cement price decreased 2% in euros and increased 20% in
dollar terms compared to the year-earlier period. The average ready-mix price
increased 1% in euros and 24% in dollar terms versus the second quarter of
2002.
The average cash cost of goods sold per metric ton increased 34% in dollar
terms versus the second quarter of 2002. The increase in cash costs, when
expressed in dollar terms, is due to the appreciation of the euro versus the
U.S. dollar between June 2002 and June 2003.
- ------------------------------------------------------------------------------
Please refer to the end of this report for definition Page 5
of terms, U.S. dollar translation methodology and
other important disclosures.
CEMEX logo
[GRAPHIC OMITTED]
VENEZUELA
===============================================================================
Domestic cement volume for CEMEX's Venezuelan operations decreased 16%
compared to the second quarter of 2002, while ready-mix volume decreased 12%.
Venezuela is still going through an economic downturn, which has significantly
affected overall demand in the country; lower oil revenue is cutting public
expenditure and lack of confidence is dampening private investment. The
effects of this economic slowdown have been partially compensated by cost
reductions and customer oriented initiatives, which have strengthened the
value proposition to our customers.
Export volume from the company's Venezuelan operations during the second
quarter increased 45% compared to the year-earlier period. The North America
and Caribbean regions accounted for 52% and 48% of CEMEX Venezuela's exports,
respectively.
Domestic cement prices increased 8% in constant Bolivar terms and decreased 3%
in dollar terms compared to the second quarter of 2002. During the second
quarter of 2003, the average ready-mix price increased 8% in constant Bolivar
terms, and decreased 2% in dollar terms compared to the year-earlier period.
The average cash cost of goods sold per metric ton decreased by 12% in dollar
terms compared to the second quarter of 2002. A large portion of our cash
costs is Bolivar-denominated; hence, the bolivar's depreciation caused these
costs to decrease in U.S. dollar terms.
COLOMBIA
==============================================================================
During the second quarter of 2003, domestic cement volume for the Company's
Colombian operations decreased 1%, while ready-mix volume increased 25% versus
the year-earlier period. Prudent fiscal management has allowed for public
investment, fueling the construction sector, while low interest rates and low
inflation are fostering moderate demand for housing and private investment.
CEMEX's average realized cement price in Colombia was 9% higher in Colombian
pesos and 11% lower in dollar terms versus the second quarter of 2002. The
average ready-mix price increased 1% in Colombian pesos and decreased 17% in
dollar terms versus the year-earlier period.
The average cash cost of goods sold per metric ton decreased 2% in dollar
terms versus the second quarter of 2002.
OTHER OPERATIONS
==============================================================================
Our Central American and Caribbean operations increased sales and domestic
cement volumes by 34% and 26%, respectively, versus the second quarter of last
year. These increases are mainly attributable to a strong performance of our
operations in Panama, Costa Rica and Nicaragua, as well as the consolidation
of our newly acquired Puerto Rican unit. Ready-mix volumes increased 332%
versus the year earlier period primarily due to higher volumes in Panama and
the Dominican Republic, as well as the incorporation of Puerto Rican Cement,
which has sizeable ready-mix operations.
In Egypt, sales and domestic cement volume decreased 18% and 24% respectively
versus the second quarter of 2002; however EBITDA was up 10% versus the same
quarter last year. CEMEX Egypt increased cement prices by 39% in Egyptian
pounds versus the first quarter of 2003, which partially explains the decrease
in cement volume. The second quarter of 2002 experienced exceptionally high
cement volumes, which also explains the decrease in volumes during this
quarter when compared to the second quarter of 2002. The construction sector
in Egypt remains stable, with public works driving most of demand. The
commercial and tourism sectors remain depressed.
The average domestic cement price in Egypt increased 3% in dollar terms and
33% in Egyptian pounds versus the second quarter of 2002.
Our Asian operations, which include the Philippines, Thailand, Taiwan and
Bangladesh, experienced decreased sales and domestic cement volumes of 8% and
5% respectively versus the second quarter of 2002. The average domestic cement
price for the region decreased 9% in dollar terms versus the second quarter of
2002, and increased 6% versus the first quarter of 2003. Lower cement volume
in the Philippines was due to the early start of the rain season, and weak
public works spending. The self-construction sector in the Philippines
continues to be the main driver of demand.
- ------------------------------------------------------------------------------
Please refer to the end of this report for definition Page 6
of terms, U.S. dollar translation methodology and
other important disclosures.
CONSOLIDATED INCOME STATEMENT & Balance Sheet
- --------------------------------------------------------------------------------------------------------------------------------
CEMEX S.A. de C.V. AND SUBSIDIARIES
(Thousands of U.S. Dollars, except per ADR amounts)
January - June Second quarter
-------------------------- -------------------------
INCOME STATEMENT 2003 2002 % Var. 2003 2002 % Var.
- ------------------------------------------------------------------------------------------------------------------------------
Net Sales 3,489,693 3,264,166 7% 1,855,004 1,741,503 7%
Cost of Sales (2,026,586) (1,785,168) 14% (1,067,776) (946,297) 13%
- ------------------------------------------------------------------------------------------------------------------------------
Gross Profit 1,463,107 1,478,999 (1%) 787,228 795,206 (1%)
Selling, General and Administrative Expenses (765,509) (765,367) 0% (397,297) (391,756) 1%
- ------------------------------------------------------------------------------------------------------------------------------
Operating Income 697,598 713,631 (2%) 389,931 403,450 (3%)
Financial Expenses (190,531) (160,108) 19% (96,440) (83,167) 16%
Financial Income 11,908 29,710 (60%) 3,545 14,246 (75%)
Exchange Gain (Loss), Net (22,624) (67,415) (66%) 48,455 (107,409) N/A
Monetary Position Gain (Loss) 166,702 174,817 (5%) 51,933 94,307 (45%)
Gain (Loss) on Marketable Securities (41,183) (78,875) (48%) 65,939 (122,169) N/A
Total Comprehensive Financing (Cost) Income (75,729) (101,871) (26%) 73,432 (204,192) N/A
Other Expenses, Net (175,128) (210,123) (17%) (106,356) (122,521) (13%)
- ------------------------------------------------------------------------------------------------------------------------------
Net Income Before Income Taxes 446,742 401,638 11% 357,007 76,737 365%
Income Tax (52,451) (46,866) 12% (42,661) (12,082) 253%
Employees' Statutory Profit Sharing (5,049) (5,426) (7%) (2,557) (2,776) (8%)
Total Income Tax & Profit Sharing (57,500) (52,291) 10% (45,217) (14,858) 204%
- ------------------------------------------------------------------------------------------------------------------------------
Net Income Before Participation
of Uncons. Subs. and Ext. Items 389,242 349,347 11% 311,790 61,879 404%
Participation in Unconsolidated Subsidiaries 14,141 12,312 15% 7,962 9,135 (13%)
Consolidated Net Income 403,383 361,659 12% 319,752 71,014 350%
Net Income Attributable to Min. Interest 11,068 17,446 (37%) 10,796 (2,134) N/A
MAJORITY INTEREST NET INCOME 392,314 344,212 14% 308,956 73,148 322%
- ------------------------------------------------------------------------------------------------------------------------------
EBITDA 1,013,375 1,013,878 (0%) 552,321 555,213 (1%)
Earnings per ADR 1.28 1.17 9% 1.00 0.25 304%
- ------------------------------------------------------------------------------------------------------------------------------
As of June 30
-------------------------
BALANCE SHEET 2003 2002 % Var.
- ------------------------------------------------------------------------------------------------------------------------------
Total Assets 16,700,910 16,138,929 3%
Cash and Temporary Investments 710,865 470,167 51%
Trade Accounts Receivables 469,561 652,115 (28%)
Other Receivables 499,346 445,643 12%
Inventories 720,812 694,626 4%
Other Current Assets 102,294 149,529 (32%)
Current Assets 2,502,879 2,412,080 4%
Fixed Assets 9,024,855 8,710,066 4%
Other Assets 5,173,176 5,016,783 3%
- ----------------------------------------------------------------------------------------------
Total Liabilities 9,533,095 8,612,827 11%
Current Liabilities 3,504,861 2,472,259 42%
Long-Term Liabilities 3,824,357 4,685,608 (18%)
Other Liabilities 2,203,877 1,454,960 51%
- ----------------------------------------------------------------------------------------------
Consolidated Stockholders' Equity 7,167,815 7,526,103 (5%)
Stockholders' Equity Attributable to Minority
Interest 1,163,076 1,370,324 (15%)
Stockholders' Equity Attributable to Majority
Interest 6,004,739 6,155,779 (2%)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Please refer to the end of this report for definition Page 7
of terms, U.S. dollar translation methodology and
other important disclosures.
CONSOLIDATED INCOME STATEMENT & Balance Sheet
==========================================================================================================================
CEMEX S.A. de C.V. AND SUBSIDIARIES
(Thousands of Mexican Pesos in real terms as of June 30, 2003
except per ADR amounts)
January - June Second quarter
--------------------------- ------------------------------
INCOME STATEMENT 2003 2002 % Var. 2003 2002 % Var.
- ----------------------------------------------------------------------------------------------------------------------------------
Net Sales 36,502,194 34,012,948 7% 19,403,338 18,146,636 7%
Cost of Sales (21,198,094) (18,601,631) 14% (11,168,934) (9,860,512) 13%
- ----------------------------------------------------------------------------------------------------------------------------------
Gross Profit 15,304,099 15,411,316 (1%) 8,234,404 8,286,124 (1%)
Selling, General and Administrative Expenses (8,007,221) (7,975,206) 0% (4,155,725) (4,082,132) 2%
- ----------------------------------------------------------------------------------------------------------------------------------
Operating Income 7,296,878 7,436,110 (2%) 4,078,679 4,203,993 (3%)
Financial Expenses (1,992,959) (1,668,344) 19% (1,008,758) (866,610) 16%
Financial Income 124,553 309,584 (60%) 37,082 148,447 (75%)
Exchange Gain (Loss), Net (236,644) (702,472) (66%) 506,840 (1,119,211) N/A
Monetary Position Gain (Loss) 1,743,707 1,821,613 (4%) 543,219 982,688 (45%)
Gain (Loss) on Marketable Securities (430,777) (821,887) (48%) 689,720 (1,273,014) N/A
Total Comprehensive Financing (Cost) Income (792,120) (1,061,506) (25%) 768,103 (2,127,700) N/A
Other Expenses, Net (1,831,837) (2,189,499) (16%) (1,112,485) (1,276,679) (13%)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Income Before Income Taxes 4,672,920 4,185,105 12% 3,734,297 799,614 367%
Income Tax (548,634) (488,343) 12% (446,231) (125,893) 254%
Employees' Statutory Profit Sharing (52,818) (56,535) (7%) (26,742) (28,930) (8%)
Total Income Tax & Profit Sharing (601,452) (544,879) 10% (472,973) (154,823) 205%
- ----------------------------------------------------------------------------------------------------------------------------------
Net Income Before Participation
of Uncons. Subs. and Ext. Items 4,071,469 3,640,227 12% 3,261,323 644,792 406%
Participation in Unconsolidated Subsidiaries 147,912 128,295 15% 83,282 95,186 (13%)
Consolidated Net Income 4,219,381 3,768,521 12% 3,344,606 739,977 352%
Net Income Attributable to Min. Interest 115,774 181,794 (36%) 112,922 (22,232) N/A
MAJORITY INTEREST NET INCOME 4,103,607 3,586,727 14% 3,231,684 762,209 324%
- ----------------------------------------------------------------------------------------------------------------------------------
EBITDA 10,599,907 10,564,707 0% 5,777,274 5,785,379 (0%)
Earnings per ADR 13.38 11.64 15% 10.45 2.46 325%
- ---------------------------------------------------------------------------------------------------------------------------------
As of June 30
-------------------------
BALANCE SHEET 2003 2002 % Var.
- ---------------------------------------------------------------------------------------------------------------------------------
Total Assets 174,691,518 168,169,289 4%
Cash and Temporary Investments 7,435,649 4,899,184 52%
Trade Accounts Receivables 4,911,613 6,795,101 (28%)
Other Receivables 5,223,161 4,643,649 12%
Inventories 7,539,689 7,238,079 4%
Other Current Assets 1,069,998 1,558,110 (31%)
Current Assets 26,180,110 25,134,123 4%
Fixed Assets 94,399,984 90,759,780 4%
Other Assets 54,111,424 52,275,387 4%
- -----------------------------------------------------------------------------------
Total Liabilities 99,716,171 89,746,526 11%
Current Liabilities 36,660,850 25,761,187 42%
Long-Term Liabilities 40,002,770 48,824,511 (18%)
Other Liabilities 23,052,552 15,160,828 52%
- -----------------------------------------------------------------------------------
Consolidated Stockholders' Equity 74,975,345 78,422,763 (4%)
Stockholders' Equity Attributable to
Minority Interest 12,165,776 14,278,921 (15%)
Stockholders' Equity Attributable to
Majority Interest 62,809,569 64,143,844 (2%)
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Please refer to the end of this report for definition Page 8
of terms, U.S. dollar translation methodology and
other important disclosures.
OPERATING SUMMARY PER COUNTRY
- ------------------------------------------------------------------------------------------------------------------------------
In thousands of U.S. dollars
January - June Second quarter
--------------------- ---------------------
NET SALES 2003 2002 % Var. 2003 2002 % Var.
- -------------------------------------------------------------------------------------------------------------------------------
Mexico 1,365,796 1,266,976 8% 713,725 657,286 9%
U.S.A. 801,908 866,270 (7%) 452,284 481,990 (6%)
Spain 564,342 466,479 21% 291,388 238,277 22%
Venezuela 137,285 134,023 2% 79,762 67,899 17%
Colombia 97,488 101,329 (4%) 49,360 52,046 (5%)
Egypt 55,123 75,055 (27%) 30,509 37,253 (18%)
Central America & the Caribbean region 288,392 221,068 30% 154,125 114,617 34%
Asia region 98,855 103,082 (4%) 48,538 52,964 (8%)
- -------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations 80,505 29,885 169% 35,313 39,171 (10%)
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL 3,489,693 3,264,166 7% 1,855,004 1,741,503 7%
- -------------------------------------------------------------------------------------------------------------------------------
GROSS PROFIT
- ----------------------------------------------------------------------------------------------------------------------------------
Mexico 782,737 741,540 6% 412,428 399,624 3%
U.S.A. 248,101 300,975 (18%) 138,058 172,549 (20%)
Spain 206,257 176,336 17% 102,503 92,303 11%
Venezuela 61,953 63,760 (3%) 39,958 31,346 27%
Colombia 53,325 54,627 (2%) 27,918 27,784 0%
Egypt 20,711 27,148 (24%) 14,527 12,449 17%
Central America & the Caribbean region 88,020 75,119 17% 43,929 39,243 12%
Asia region 27,312 29,515 (7%) 14,097 14,704 (4%)
- -------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations (25,309) 9,979 N/A (6,192) 5,204 N/A
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL 1,463,107 1,478,999 (1%) 787,228 795,206 (1%)
- -------------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME
- -------------------------------------------------------------------------------------------------------------------------------
Mexico 539,590 504,432 7% 287,972 275,620 4%
U.S.A. 86,696 144,299 (40%) 54,674 91,006 (40%)
Spain 128,112 114,789 12% 62,341 62,872 (1%)
Venezuela 43,011 43,141 (0%) 31,112 21,602 44%
Colombia 37,404 40,969 (9%) 20,522 20,644 (1%)
Egypt 8,130 11,358 (28%) 8,219 4,287 92%
Central America & the Caribbean region 46,659 47,644 (2%) 23,281 25,384 (8%)
Asia region (6,464) (157) 4018% (3,292) 754 N/A
- -------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations (185,540) (192,845) (4%) (94,898) (98,720) (4%)
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL 697,598 713,631 (2%) 389,931 403,450 (3%)
- -------------------------------------------------------------------------------------------------------------------------------
EBITDA
- -------------------------------------------------------------------------------------------------------------------------------
Mexico 612,452 568,603 8% 324,531 308,455 5%
U.S.A. 159,366 213,156 (25%) 91,943 125,716 (27%)
Spain 163,010 130,721 25% 80,616 76,272 6%
Venezuela 66,330 62,324 6% 41,780 32,980 27%
Colombia 57,537 60,542 (5%) 29,756 30,986 (4%)
Egypt 22,710 30,876 (26%) 15,361 14,023 10%
Central America & the Caribbean region 65,163 58,640 11% 32,545 30,986 5%
Asia region 9,763 16,465 (41%) 4,792 9,029 (47%)
- -------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations (142,956) (127,450) 12% (69,002) (73,234) (6%)
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL 1,013,375 1,013,878 (0%) 552,321 555,213 (1%)
- -------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Please refer to the end of this report for definition Page 9
of terms, U.S. dollar translation methodology and
other important disclosures.
OPERATING SUMMARY PER COUNTRY
- ----------------------------------------------------------------------------------------------
As a percentage of net sales
January - June Second quarter
------------------------- ------------------------
OPERATING INCOME MARGIN 2003 2002 2003 2002
- ----------------------------------------------------------------------------------------------
Mexico 39.5% 39.8% 40.3% 41.9%
U.S.A. 10.8% 16.7% 12.1% 18.9%
Spain 22.7% 24.6% 21.4% 26.4%
Venezuela 31.3% 32.2% 39.0% 31.8%
Colombia 38.4% 40.4% 41.6% 39.7%
Egypt 14.7% 15.1% 26.9% 11.5%
Central America & the Caribbean
region 16.2% 21.6% 15.1% 22.1%
Asia region (6.5%) (0.2%) (6.8%) 1.4%
- ----------------------------------------------------------------------------------------------
CONSOLIDATED MARGIN 20.0% 21.9% 21.0% 23.2%
- ----------------------------------------------------------------------------------------------
EBITDA MARGIN
- ----------------------------------------------------------------------------------------------
Mexico 44.8% 44.9% 45.5% 46.9%
U.S.A. 19.9% 24.6% 20.3% 26.1%
Spain 28.9% 28.0% 27.7% 32.0%
Venezuela 48.3% 46.5% 52.4% 48.6%
Colombia 59.0% 59.7% 60.3% 59.5%
Egypt 41.2% 41.1% 50.3% 37.6%
Central America & the Caribbean
region 22.6% 26.5% 21.1% 27.0%
Asia region 9.9% 16.0% 9.9% 17.0%
- -----------------------------------------------------------------------------------------------
CONSOLIDATED MARGIN 29.0% 31.1% 29.8% 31.9%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Please refer to the end of this report for definition Page 10
of terms, U.S. dollar translation methodology and
other important disclosures.
VOLUME SUMMARY
- --------------------------------------------------------------------------------------------------------
Consolidated volume summary
Cement: Thousands of metric tons
Ready-mix: Thousands of cubic meters
January - June Second quarter
------------------- -------------------
2003 2002 % Var. 2003 2003 % Var.
- --------------------------------------------------------------------------------------------------------
Consolidated cement volume 31,615 30,247 5% 16,782 16,130 4%
Consolidated ready-mix volume 10,637 9,276 15% 5,561 4,846 15%
- --------------------------------------------------------------------------------------------------------
Per-country volume summary
January - June Second quarter Second quarter 2003 Vs.
DOMESTIC CEMENT VOLUME 2003 Vs. 2002 2003 Vs. 2002 First quarter 2003
------------------- ----------------- ----------------------
Mexico 6% 2% 6%
U.S.A. (3%) (3%) 35%
Spain 6% 7% 7%
Venezuela (33%) (22%) 25%
Colombia (0%) (1%) (1%)
Egypt (13%) (24%) (14%)
Central America & the Caribbean
region 24% 26% 6%
Asia Region 4% (5%) (7%)
READY-MIX VOLUME
Mexico 16% 10% 7%
U.S.A. 5% 9% 13%
Spain 4% 5% 3%
Venezuela (15%) 0% 33%
Colombia 32% 25% 10%
Central America & the Caribbean
region 312% 332% 22%
Asia Region N/A N/A N/A
EXPORT CEMENT VOLUME
Mexico (22%) (24%) (7%)
Spain (7%) (9%) 6%
Venezuela 7% 45% 113%
- --------------------------------------------------------------------------------------------------------
Please refer to the end of this report for definition Page 11
of terms, U.S. dollar translation methodology and
other important disclosures.
PRICE SUMMARY
- ---------------------------------------------------------------------------------------------------------------------------
Second quarter 2003 Vs.
Second quarter 2003 Vs. 2002 First quarter 2003
---------------------------------- ----------------------------------
% Var. % Var. % Var. % Var.
DOMESTIC CEMENT PRICE U.S. dollar Local currency U.S. dollar Local currency
- ---------------------------------------------------------------------------------------------------------------------------
Mexico (1) (1%) 2% 8% 2%
U.S.A. (2%) (2%) (0%) (0%)
Spain 20% (2%) 6% (0%)
Venezuela (1) (3%) 8% 6% (3%)
Colombia (11%) 9% 4% 0%
Egypt 3% 33% 29% 39%
Central America & the Caribbean region (2) (8%) N/A (2%) N/A
Asia Region (2) (9%) N/A 6% N/A
- ---------------------------------------------------------------------------------------------------------------------------
READY-MIX PRICE
- ---------------------------------------------------------------------------------------------------------------------------
Mexico (1) (5%) (3%) 9% 3%
U.S.A. 0% 0% 0% 0%
Spain 24% 1% 9% 3%
Venezuela (1) (2%) 8% 12% 3%
Colombia (17%) 1% 5% 2%
Central America & the Caribbean region (2) (5%) N/A (3%) N/A
Asia Region (2) (20%) N/A (2%) N/A
- ---------------------------------------------------------------------------------------------------------------------------
1) Local currency price variation for Mexico and Venezuela is presented in constant currency terms as of June 30, 2003.
2) Volume weighted-average price.
- ---------------------------------------------------------------------------------------------------------------------------
Please refer to the end of this report for definition Page 12
of terms, U.S. dollar translation methodology and
other important disclosures.
DEFINITION OF TERMS AND DISCLOSURES
===============================================================================
Methodology for consolidation and presentation of results
CEMEX consolidates its results in Mexican pesos under Mexican generally
accepted accounting principles. For the convenience of the reader, U.S. dollar
amounts for the consolidated entity are calculated by converting the
constant-Mexican peso amounts at the end of each quarter using the end of
period Mexican peso/U.S. dollar exchange rate for each quarter. The exchange
rates used to convert results for the second quarter of 2003, first quarter of
2003 and second quarter of 2002 are 10.46, 10.78 and 9.94 Mexican pesos per 1
U.S. dollar, respectively. CEMEX's weighted average inflation factor between
June 30, 2002 and June 30, 2003 was 4.83%.
Per-country figures are presented in U.S. dollars for the convenience of the
reader. In the consolidation process, each country's figures are converted to
U.S. dollars (except CEMEX Mexico) and then to Mexican pesos under Mexican
generally accepted accounting principles. Each country's figures presented in
U.S. dollars at June 30, 2003 and June 30, 2002 can be converted to its
original local currency amount by multiplying the U.S. dollar figure by the
corresponding exchange rate provided below.
To convert June 30, 2002 U.S. dollar figures for Mexico and Venezuela to
constant pesos and bolivars, respectively, as of June 30, 2003 it is necessary
to first convert the June 30, 2002 U.S. dollars to the corresponding local
currency (using the exchange rates provided below), and then multiply the
resulting amount by the inflation rate factor provided in the table below.
June 30
-----------------------
Exchange rate 2003 2002 Inflation rate factor
- -------------------------------------------------------------------------------
Mexico 10.46 9.94 1.045
Spain 0.87 1.01
Venezuela 1,600 1,353 1.342
Colombia 2,817 2,399
Egypt 6.07 4.64
- -------------------------------------------------------------------------------
Amounts provided in units of local currency per 1 U.S. dollar.
The Central America & Caribbean region includes CEMEX's operations in Costa
Rica, the Dominican Republic, Panama, Nicaragua and Puerto Rico, as well as
our trading operations in the Caribbean region. The Asia region includes
CEMEX's operations in the Philippines, Taiwan, Thailand and Bangladesh.
CEMEX's quarterly reports before 2003 consolidated CEMEX's operations in
Panama and the Dominican Republic into Venezuela. Beginning in 2003, CEMEX's
Venezuelan operations will not include Panama and the Dominican Republic for
presentation purposes, but will now be consolidated into the Central America &
Caribbean region. For comparison purposes, Venezuela's and Central America &
Caribbean region's figures for 2002 were restated to make them comparable with
the new disclosure procedures.
Definition of terms
EBITDA. Equals operating income plus depreciation and operating amortization.
Free cash flow. Equals EBITDA minus net interest expense, capital expenditures,
change in working capital, taxes paid, dividends on preferred equity, and other
cash items. Capital expenditures. Maintenance spending on our cement and ready
mix businesses, and expansion of current facilities of cement and ready mix.
Equity obligations. Equal the outstanding US$650 million balance of preferred
equity plus the outstanding US$66 million of preferred capital securities.
Net debt. Equals total debt plus equity obligations, minus cash and cash
equivalents.
Interest plus preferred dividend coverage. Is calculated by dividing EBITDA
for the last twelve months by the sum of interest expense and preferred
dividend payments for the last twelve months (all amounts in constant
currency terms).
Net debt/EBITDA. Is calculated by dividing net debt at the end of the quarter
by EBITDA for the last twelve months (EBITDA in constant currency terms).
Capitalization ratio. Is calculated by dividing the sum of total debt, the
US$66 million outstanding preferred capital securities, and the present value
of the forward agreements put in place to hedge our warrant obligations by the
sum of total debt, the US$66 million outstanding preferred capital securities,
the present value of the forward agreements put in place to hedge our warrant
obligations and consolidated stockholders' equity.
Earnings per ADR
For the calculation of earnings per ADR, the number of average ADRs
outstanding used was as follows: 309.2 million for the second quarter of 2003
and 295.8 million for the second quarter of 2002; 306.7 million for the first
six months of 2003, and 299.3 million for the first six months of 2002.
- --------------------------------------------------------------------------------
Page 13
