UPDATE 6-Cemex cuts 2010 EBITDA view, focus on shaving debt

* Cemex trims EBITDA forecast, hit by foreign exchange

* No major asset sales seen, but Malaysia an option

* Debt payments through 2012 under control, Cemex says

* Shares slip on cut in forecasts
(Adds details on competitors, Venezuela, share price)

By Robin Emmott and Gabriela Lopez

MONTERREY, Mexico, June 3 (BestGrowthStock) – Cemex, the world’s
No. 3 cement maker, blamed the slumping euro for a 5 percent
cut in its forecast of pretax earnings for 2010 but said it is
finally seeing a recovery in the key U.S. market.

Chief Executive Lorenzo Zambrano, speaking in New York via
a webcast on Thursday, said the Mexican company expects
earnings before interest, taxes, depreciation and amortization
(EBITDA) of $2.75 billion this year and free cash flow, after
maintenance and capital expenditures, of $800 million.

Cemex (CX.N: ) (CMXCPO.MX: ), struggling with a sluggish U.S.
housing market and weakness in Spain after narrowly avoiding
default last year, had previously forecast its EBITDA this year
would be $2.9 billion. [ID:nLDE63R05T]

“The decline of the euro and the (Mexican) peso if
sustained will affect our reported performance in dollar terms.
Thus, and only because of recent exchange rate changes, I
expect our EBITDA to be about $2.75 billion,” he told
investors. EBITDA last year was $2.65 billion, hit by the
collapse in U.S. volumes.

Cemex’s New York-traded shares fell 1.84 percent to $10.68
after slumping as much as 3 percent earlier in the day.

Monterrey-based Cemex, which had to refinance $15 billion
in debt in August last year, sees no liquidity problems in the
next two or three years, said Zambrano, who has faced sharp
investor criticism for the way he financed the 2007 takeover of
Australia’s Rinker with short-term bank debt.

Cemex, which completes globally with France’s Lafarge
(LAFP.PA: ) and Switzerland’s Holcim (HOLN.VX: ), has been
wrestling to pay back its nearly $18 billion debt load after
the bottom fell out of the U.S. housing market just after the
company bought Rinker.

Zambrano said he would continue to improve Cemex’s debt
structure, but no major assets sales were planned. The company
said noncore assets in countries like Malaysia and Austria
could be divested, but not at a fire sale price.

He added he was not counting on compensation from
Venezuela, which nationalized Cemex’s operations in 2008,
anytime soon.

“Growth is in our DNA; it is what we are. But in the short
term nothing is more important than reducing our debt,”
Zambrano said. “We are overleveraged … Most of our cash flow
and our energy is devoted to deleveraging the company.”

The company said its net debt including the perpetuals is
$17.6 billion, down from $21.3 billion in June last year.


Cemex’s Rinker takeover made it the top cement maker in the
United States and executives acknowledged that the company’s
efforts to cut costs by $150 million this year would be
meaningless without a U.S. recovery.

Francisco Garza, head of the Americas region, said U.S.
government stimulus spending and a gradual recovery in housing
should help pull the company out of its long slump.

The company in March saw its first month-over-month
increase in U.S. sales volumes since 2006. Cemex is also
raising prices by $11 per metric tonne from July.

“U.S. markets are finally recovering … Most of the growth
that we see is due to public spending,” Garza said, adding that
highways and bridges have provided a big boost.

Fernando Gonzalez, executive vice president for planning
and finance, said debt payments through 2012 will be

“We expect to deleverage faster than our financing
agreement,” Gonzalez said, referring to the deal with banks
last year that saved the company from default.

Chief Financial Officer Rodrigo Trevino said the company
should have an investment grade debt structure by 2013. Cemex
lost its investment-grade rating last year as worries about its
ability to manage its debt mounted.

On Wednesday, Cemex said investors agreed to sell back 2.6
billion pesos ($208 million) in short-term debt, falling short
of the company’s offer.
(For a factbox on the key developments from the investors’
please see: ID:nN03107664)

Investing Advice

(Additional reporting by Noel Randewich, Robert Campbell and
Michael O’Boyle; Editing by Bernard Orr)

UPDATE 6-Cemex cuts 2010 EBITDA view, focus on shaving debt