Q2 2024 GCC SAB de CV Earnings Call Transcript
Key Points
- Strong demand in the oil and gas sector, with a $15 per ton price increase implemented for oil well clients.
- Favorable fuel and power costs in Mexico enabled solid second quarter margins.
- Continued cost efficiency measures and commercial strategy led to strong bottom line results for the first half of the year.
- EBITDA margin for the quarter increased by 70 basis points compared to the prior year's quarter to 37.1%.
- Net financial income significantly increased to $15.2 million from $4.5 million in the second quarter of 2023.
- Consolidated sales for the second quarter decreased by 1% year-over-year due to decreased volumes.
- Revenue from US operations remained flat despite a significant decrease in cement and concrete volumes.
- Mexico sales decreased by 2.8% year-over-year, with cement and concrete volumes dropping by 7.1% and 12.4%, respectively.
- Increased maintenance expenses and SG&A as a percentage of sales rose by 70 basis points year-over-year.
- The mining segment in Mexico continues to contract, with no improvement expected in the second half of the year.
Q3 of this year. Oil and gas related cement demand remains strong with this decline offsetting volume shortages in other segments during the second quarter. Along these lines on July first, we implemented a $15 per ton price increase for our oil well clients.
As a brief update on the infrastructure investment and job site related infrastructure demand remains consistent with normal levels for the quarter to date, we are not seeing the Jobs Act driven delta. The industry had initially expected as part of this incremental funds appear to have been offset by the construction cost inflation to which I have referred.
Turning to Mexico, favorable fuel and power costs enabled solid second quarter margins. Results were influenced by reduced demand ahead of the Mexican elections also with deceleration in industrial project inquiries due to continued power supply constraints.
However, construction of the Terra Nova power substation requires continued during the second quarter and remains on track for completion in
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