Cemex Q2 '25 Results Indicate Negative Cycle Turn

Cemex's Q2 '25 results indicate significant volume challenges in Mexico and a similar dynamic in other regions. The company's cycle is showing negative indications, with the Mexican market experiencing declining volumes. Cemex's performance is being impacted by these challenges, as well as a slowdown in the US market and the ongoing effects of the COVID-19 pandemic.

Cemex SAB de CV (NYSE:CX) released its Q2 '25 results, revealing significant volume challenges in Mexico and a similar dynamic in other regions. The company's cycle is showing negative indications, with the Mexican market experiencing declining volumes. These challenges, along with a slowdown in the US market and the ongoing effects of the COVID-19 pandemic, are impacting Cemex's performance.

In Mexico, volumes declined by 16% in cement, aggregates, and ready-mix due to high levels of precipitation and elections in the second half of 2024. The US market also experienced a decline in volumes, with cement volumes falling by 9% and aggregates by 5%. The company attributed these declines to high precipitation and continued weakness in the residential sector. In contrast, the EMEA region showed growth, with volumes up by 5% to 10% depending on the product [2].

Despite these volume challenges, Cemex's EBITDA margins remained resilient. In Mexico, margins were flat despite a double-digit fall in volumes, while in the US, margins were flat despite a 9% decline in sales. In EMEA, margins recovered strongly with higher utilization and pricing capacity, up by 2.5 percentage points. However, aggregate operating EBITDA was down by 11% due to falling sales in the two largest geographies [2].

Cemex's pricing strategy also faced challenges. Prices in Mexico and the US started to feel the heat, with cement pricing down by 2% in the US and aggregates offsetting at 5% up. The company plans to introduce another price hike in Mexico this month, which will be closely watched for its impact on volumes and margins [2].

Cemex's financial position remains strong, with a Net Debt to EBITDA ratio of around 2x, most of the debt in fixed rates, and relatively long maturities. The company is focusing on operational excellence and shareholder returns, with a strategic plan that includes a new capital allocation model. However, the company acknowledges the volatility and lack of visibility in its main markets, which could impact future performance [1].

References:
[1] https://uk.finance.yahoo.com/news/cemex-sab-cv-cx-q2-071906017.html
[2] https://seekingalpha.com/article/4804513-cemex-cycle-showing-more-indications-of-turning-negatively