===============================================================================
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: October 14, 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
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Contents
1 Press release announcing CEMEX's results for the third quarter of 2003
(attached hereto as exhibit 1).
2 Press release announcing non-dilutive equity offering by CEMEX and
current selling shareholders (attached hereto as Exhibit 2).
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: October 14, 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 third quarter of 2003.
2 Press release announcing non-dilutive equity offering by CEMEX and
current selling shareholders (attached hereto as Exhibit 2).
EXHIBIT 1
CEMEX
[GRAPHIC OMITTED]
Stock Listing Information
NYSE (ADR)
Ticker: CX
MEXICAN STOCK EXCHANGE
Ticker: CEMEX.CPO
Ratio of CEMEX.CPO to CX= 5:1
Investor Relations
In the United States
1 877 7CX NYSE
In Mexico
52 (81) 8888 4292
E-Mail
ir@cemex.com
www.cemex.com
Third
quarter Third quarter
------- -------- ------- --------------------
2003 2002 % Var. 2003 2002
---------------------------- ------- -------- ------- ---- ------------------------
Net Sales 1,834 1,721 7% % of Net Sales
---------------------------- ------- -------- ------- ---- ------------------------
Gross Profit 791 761 4% 43.1% 44.2%
---------------------------- ------- -------- ------- ---- ------------ -----------
Operating Income 405 354 14% 22.1% 20.6%
---------------------------- ------- -------- ------- ---- ------------ -----------
Majority net income 140 17 749% 7.6% 1.0%
---------------------------- ------- -------- ------- ---- ------------ -----------
EBITDA 570 505 13% 31.1% 29.3%
---------------------------- ------- -------- ------- ---- ------------ -----------
Free cash flow 384 217 77%
---------------------------- ------- -------- ------- ---- ------------ -----------
---------------------------- ------- -------- -------
Net debt 5,676 6,311 (10%)
---------------------------- ------- -------- -------
Net debt/EBITDA 2.8 3.1
---------------------------- ------- -------- -------
Interest coverage 5.0 5.5
---------------------------- ------- -------- -------
Quarterly earnings per ADR 0.43 0.05 699%
---------------------------- ------- -------- -------
Average ADRs outstanding 323.3 304.2 6%
------------------------------------------------------------------------------------
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 third quarter of 2002 to US$1,834
million. The increase was due to higher sales in Mexico, Spain, Colombia, Egypt,
the Central America and Caribbean region, and in our Asia region.
Cost of Goods Sold as a percentage of net sales increased by 1.1 percentage
points versus the year-earlier period, mainly due to higher energy and insurance
costs, and a higher proportion of ready-mix sales.
Selling, General and Administrative Expenses (SG&A) decreased 5% versus the
third quarter of 2002. As a percentage of sales, SG&A decreased 2.6 percentage
points versus the third quarter of 2002 and 1.9 percentage points for the first
nine months of the year versus the comparable period in 2002. The reduced SG&A
and SG&A margin is due to our continuing efforts to reduce overhead;
specifically, a significant reduction in travel expenses and external fees.
EBITDA increased 13% from a year ago to US$570 million, and our consolidated
EBITDA margin increased from 29% in the year-earlier period to 31% in the third
quarter of 2003. The two percentage-point increase is mainly due to higher sales
volumes and lower SG&A.
Foreign Exchange Gain (loss) for the quarter was a loss of US$118 million,
versus a loss of US$6 million in the year-earlier period. The loss was mainly
due to the depreciation of the Mexican peso, and the appreciation of the
Japanese Yen versus the U.S. dollar during the quarter.
Marketable Securities Gain (loss) for the quarter was a gain of US$6 million,
versus a loss of US$247 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, and our
interest rate derivatives, a portion of which is recognized through our income
statement.
Majority Net Income for the quarter was US$140 million, versus US$17 million in
the third quarter of 2002. The increase is mainly due to stronger sales in most
of our markets and continued efforts to reduce costs, combined with the
improvement in our marketable securities position versus the third quarter of
2002.
Net debt at the end of the third quarter was US$5,676 million, US$153 million
lower than that of the second quarter of this year. The ratio of Net debt to
EBITDA reached 2.8 times, versus 3.0 times at the end of the second quarter of
2003. Free cash flow in the amount of US$215 million was used to reduce net debt
during the quarter; however, when expressed in U.S. dollars, net debt decreased
by US$153 million due to the appreciation of the Japanese Yen and the Euro
versus the U.S. dollar during the quarter.
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translation methodology Page 3 and other important disclosures.
Page 1
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EBITDA & Free Cash Flow
--------------------------------------------------------------------------------------------------------
Third quarter January-September
-------- ------- -------- ------- ------ -----------
2003 2002 % Var. 2003 2002 % Var.
----------------------------------------------- -------- ------- -------- ----------- ------ -----------
Operating income 405 354 14% 1,095 1,057 4%
----------------------------------------------- -------- ------- -------- ----------- ------ -----------
+ Depreciation and operating amortization 165 151 478 447
----------------------------------------------- -------- ------- -------- ----------- ------ -----------
EBITDA 570 505 13% 1,573 1,504 5%
----------------------------------------------- -------- ------- -------- ----------- ------ -----------
- Net financial expense 91 79 268 208
----------------------------------------------- -------- ------- -------- ----------- ------ -----------
- Capital expenditures 96 106 261 285
----------------------------------------------- -------- ------- -------- ----------- ------ -----------
- Change in working capital (34) 62 53 148
----------------------------------------------- -------- ------- -------- ----------- ------ -----------
- Taxes paid 13 24 57 133
----------------------------------------------- -------- ------- -------- ----------- ------ -----------
- Preferred dividend payments 7 7 21 28
----------------------------------------------- -------- ------- -------- ----------- ------ -----------
- Other cash items 13 10 39 46
----------------------------------------------- -------- ------- -------- ----------- ------ -----------
Free cash flow 384 217 77% 874 656 33%
----------------------------------------------- -------- ------- -------- ----------- ------ -----------
In millions of U.S. dollars.
During the quarter, US$384 million of free cash flow was used as follows: US$215
million to reduce net debt, however net debt was reduced by US$153 million
during the quarter as a result of foreign exchange rates movements in the amount
of US$62 million; US$120 million to acquire the cement assets of Dixon-Marquette
Cement, and other investments; US$13 million to reduce notional amount of equity
derivatives; US$31 million in interest payments in excess of accrued interest;
and US$5 million in other uses.
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
[GRAPHIC OMITTED]
Third quarter Second quarter Third quarter
----------------------- -------------------- --------------
2003 2002 % Var. 2003 2003 2002
---------------------------- ------- -------- ------- -- ------- -------- --- ----------------------------------- --------
Total debt 5,368 5,931 (9%) 5,824 Currency denomination
---------------------------- ------- -------- ------- -- ------- -------- ---
Short term 21% 32% 34%
---------------------------- ------- -------- ------- -- ------- -------- --- ----------------------------------- -------
Long term 79% 68% 66% U.S. Dollar 75% 76%
---------------------------- ------- -------- ------- -- ------- -------- --- ----------------------------------- -------
Equity obligations 716 716 0% 716 Japanese Yen 13% 12%
---------------------------- ------- -------- ------- -- ------- -------- --- ----------------------------------- -------
Cash & cash equivalents 409 336 22% 711 Euro 11% 11%
---------------------------- ------- -------- ------- -- ------- -------- --- ----------------------------------- -------
Net debt 5,676 6,311 (10%) 5,829 Other 1% 1%
---------------------------- ------- -------- ------- -- ------- -------- --- ----------------------------------- -------
Interest expense 94 89 96 Interest rate
---------------------------- ------- -------- ------- -- ------- -------- ---
Preferred dividends 7 7 6
---------------------------- ------- -------- ------- -- ------- -------- --- ----------------------------------- -------
Interest coverage 5.0 5.5 4.9 Fixed 69% 37%
---------------------------- ------- -------- ------- -- ------- -------- --- ----------------------------------- -------
Net debt/EBITDA 2.8 3.1 3.0 Variable 31% 32%
---------------------------- ------- -------- ------- -- ------- -------- --- ----------------------------------- -------
Capitalization ratio 44.4% 47.5% 46.9% Fixed deferred 0% 31%
---------------------------- ------- -------- ------- -- ------- -------- --- ----------------------------------- -------
In millions of U.S. dollars, except ratios.
Other developments
On August 8, 2003 we amended and increased our existing U.S. Commercial Paper
Program to US$400 million until August 2005. The transaction involved 16
relationship banks.
During the third quarter we launched through one of our subsidiaries in Europe a
new two and three-year multi-tranche loan in Euros, Dollars and Yens. The
transaction was successfully over-subscribed and will be increased to US$1.15
billion equivalent. This transaction is not yet closed. The proceeds will be
applied to repurchase the remaining US$650 million in Preferred Equity and to
refinance US$400 million outstanding under a Revolving Credit Facility, both of
which mature in 2004.
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translation methodology Page 3 and other important disclosures.
Page 2
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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 1,615,311,339
------------------------------------------------------ ----------------------
Net effect of share repurchase program 3,318,700
Exercise of stock options not hedged 397,293
Change in the number of CPOs held in subsidiaries 2,505
End of quarter CPO-equivalent units outstanding 1,619,029,837
------------------------------------------------------ ----------------------
Outstanding units equal total shares issued by CEMEX less shares held in
subsidiaries.
Employee stock options plans
As of September 30, 2003, directors, officers and other employees under our
employee stock options plans had outstanding options to acquire 149,764,397
CEMEX CPOs. Of the total options outstanding, 94.9% are hedged through equity
forward agreements and will not dilute existing shares when exercised. The total
amount of these options programs represents 9.3% 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.
Third quarter Second quarter
------------------- -----------------
Notional amounts 2003 2002 2003
---------------------------------------------- -------- ------- --- ------- -------- ----
Equity * 1,532 1,431 1,544
Foreign Exchange 3,090 3,190 3,290
Interest Rate 3,233 4,294 3,576
---------------------------------------------- -------- ------- --- ------- -------- ----
Estimated aggregate fair market value (162) (461) (223)
---------------------------------------------- -------- ------- --- ------- -------- ----
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 September 30, 2003 for
CEMEX's outstanding stock options, warrants and the CAH obligation described in
prior quarterly reports was US$25.28 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$22.97 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$623 million, arising from the fair value recognition of its
derivatives portfolio as of September 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.
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translation methodology Page 3 and other important disclosures.
Page 3
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Other Activities
--------------------------------------------------------------------------------
CEMEX announces non-dilutive equity offering
On October 1, 2003, CEMEX announced that it and certain selling ADS holders
intend, subject to market and other conditions, to commence a public offering of
25.5 million of its American Depositary Shares plus up to an additional 15% of
that amount to cover over-allotments. This transaction will not increase the
number of shares outstanding and thus will not dilute existing shareholders.
The ADSs are being offered in connection with the unwinding of several forward
contracts entered into between certain banks, including the selling ADS holders,
and CEMEX. The proceeds of the offering will be applied against certain amounts
CEMEX is obligated to pay under these forward contracts, with any excess paid to
CEMEX.
Subject to market conditions, CEMEX intends to use a portion of the net proceeds
available to it to conduct a cash tender offer for all or a portion of its
outstanding appreciation warrants, including appreciation warrants represented
by American Depositary Warrants (NYSE: CX.WSB). However, CEMEX is under no
obligation to proceed with the appreciation warrant tender offer.
Subsidiary of CEMEX Inc. acquires Dixon-Marquette Cement assets
On September 25, 2003, a subsidiary of CEMEX, Inc. acquired the cement assets of
Dixon-Marquette Cement for a total purchase price of approximately US$84
million. Located in Dixon, Illinois, the single cement facility has an annual
production capacity of 560,000 metric tons.
This acquisition strengthens our position in the Midwest region of the U.S. and
it is expected that it will contribute about US$12 million in EBITDA per year,
excluding synergies.
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translation methodology Page 3 and other important disclosures.
Page 4
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Operating Results - Mexico
--------------------------------------------------------------------------------
In Mexico, net sales were US$663 million, an increase of 5% versus the third
quarter of 2002.
Domestic gray cement volume increased 1% in the quarter and 4% for the first
nine months of the year versus the comparable periods of last year. Weather was
an important factor affecting cement demand, with unusually high precipitation
levels in August and September, when compared to the same months of 2002. The
main drivers of demand in Mexico continue to be infrastructure projects and
low-income housing.
CEMEX's average realized gray cement price in Mexico increased 2% in constant
pesos versus the third quarter of 2002, and decreased 2% in dollar terms. The
average ready-mix price remained flat in constant pesos and decreased 5% in
dollar terms compared with the third quarter of 2002.
The average cash cost of goods sold per metric ton decreased 16% in dollar terms
versus the third quarter of 2002, mostly due to lower fixed costs, and the
effect of the depreciation of the Mexican peso between September 2002 and
September 2003.
United States
--------------------------------------------------------------------------------
Net sales for CEMEX's U.S. operations during the third quarter were US$471
million, a decrease of 1% compared to the year-earlier period.
Domestic cement volume increased 3% during the third quarter of 2003 compared to
the year-earlier period, while the ready-mix volume decreased 1%. The increase
in cement volume was mainly due to pent up demand built during the previous
quarter as a result of bad weather conditions in the Southeast, combined with
strong sales in the Midwest. The residential sector continues to benefit from
low interest rates, while spending on infrastructure remains stable, but at a
low level.
The average realized cement price decreased 2% versus the third quarter of 2002,
while the average ready-mix price remained flat versus the same period a year
ago.
The average cash cost of goods sold per metric ton increased 3% versus the third
quarter of 2002, due mainly to higher energy and insurance costs.
Spain
--------------------------------------------------------------------------------
Net sales for CEMEX Spain during the quarter were US$280 million, an increase of
25% versus the year-earlier period. Domestic cement volume increased 2% during
the quarter compared to the same period a year ago. Ready-mix volume increased
9% for the quarter versus the year-earlier period. Our Spanish operations
continue to benefit from the high level of construction activity in the country.
Residential construction is at a high level, fueled by low interest rates, while
infrastructure spending also remains at a high level due to Spain's
infrastructure program.
The average domestic cement price decreased 1% in euros and increased 13% in
dollar terms compared to the year-earlier period. The average ready-mix price
decreased 2% in euros and increased 13% in dollar terms versus the third quarter
of 2002.
The average cash cost of goods sold per metric ton increased 29% in dollar terms
versus the third 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 September 2002 and September 2003.
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translation methodology Page 3 and other important disclosures.
Page 5
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Venezuela
--------------------------------------------------------------------------------
Domestic cement volume for CEMEX's Venezuelan operations decreased 11% compared
to the third quarter of 2002, while ready-mix volume decreased 6%. Cement demand
from the self construction sector was strong during the quarter; however there
is still limited investment in infrastructure
Export volume from the company's Venezuelan operations during the third quarter
increased 37% compared to the year-earlier period. The North America and
Caribbean regions accounted for 66% and 34% of CEMEX Venezuela's third quarter
exports, respectively.
Domestic cement prices decreased 6% in constant Bolivar terms and increased 7%
in dollar terms compared to the third quarter of 2002. During the third quarter
of 2003, the average ready-mix price increased 5% in constant Bolivar terms, and
increased 20% in dollar terms compared to the year-earlier period.
The average cash cost of goods sold per metric ton increased 20% in dollar terms
compared to the third quarter of 2002. The increase is due to major maintenance
performed in one of our cement kilns during the quarter, whereas this
maintenance did not occur in the third quarter of last year.
Colombia
--------------------------------------------------------------------------------
During the third quarter of 2003, domestic cement volume for the Company's
Colombian operations increased 12%, while ready-mix volume increased 39% versus
the year-earlier period. Private residential construction coupled with
infrastructure investment in transportation have been the main drivers of cement
and ready mix demand. The self construction sector is growing but at a low rate.
CEMEX's average realized cement price in Colombia was 4% higher in Colombian
pesos and 2% lower in dollar terms versus the third quarter of 2002. The average
ready-mix price increased 5% in Colombian pesos and remained flat in dollar
terms versus the year-earlier period.
The average cash cost of goods sold per metric ton increased 42% in dollar terms
versus the third quarter of 2002. The increase is due to major maintenance
performed in one of our cement kilns during the quarter, whereas last year we
did not perform major maintenance in our kilns.
Other Operations
--------------------------------------------------------------------------------
Net sales for our Central American and Caribbean operations increased 4% versus
the third quarter of last year. The increase is mainly due to a strong
performance of our operations in Panama, Costa Rica, and the incorporation of
Puerto Rican Cement. Domestic cement volume remained flat versus the third
quarter of last year, while Ready-mix volume increased 26% primarily due to
higher volumes in al of our markets, as well as the incorporation of Puerto
Rican Cement, which has sizeable ready mix operations and was included in the
consolidated results for two months during the third quarter of 2002.
In Egypt, net sales and domestic cement volume increased 9% and 1% respectively
versus the third quarter of 2002. Investment in infrastructure remains as the
main driver of demand, while spending in the commercial and tourism sectors
remains at a low level.
The average domestic cement price in Egypt increased 25% in Egyptian pounds and
decreased 6% in dollar terms versus the third quarter of 2002.
Our Asian operations, which include the Philippines, Thailand, Taiwan and
Bangladesh, increased Net sales by 18% versus the third quarter of 2002, as all
of our markets experienced an improvement in sales, while domestic cement volume
decreased 5%. Our weighted average domestic cement prices in the region
increased 18% in dollar terms versus the same period a year ago. Activity in the
construction sector in the Philippines remains at a low level, driven mainly by
decreased government spending in infrastructure. Cement demand was also affected
during the quarter by a prolonged rainy season.
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Page 6
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Consolidated Income Statement & Balance Sheet
CEMEX S.A. de C.V. AND SUBSIDIARIES
(Thousands of U.S. Dollars, except per ADR amounts)
January - September Third quarter
INCOME STATEMENT 2003 2002 % Var. 2003 2002 % Var.
----------------------------------------------------------------------------------------- ------------------------------------
Net Sales 5,288,249 4,938,219 7% 1,834,365 1,720,850 7%
Cost of Sales (3,049,114) (2,718,974) 12% (1,043,323) (959,399) 9%
----------------------------------------------------------------------------------------- ------------------------------------
Gross Profit 2,239,135 2,219,245 1% 791,042 761,451 4%
Selling, General and Administrative Expenses (1,143,973) (1,161,850) (2%) (386,320) (407,456) (5%)
----------------------------------------------------------------------------------------- ------------------------------------
Operating Income 1,095,162 1,057,395 4% 404,722 353,995 14%
Financial Expenses (282,164) (246,360) 15% (93,588) (88,547) 6%
Financial Income 13,953 38,662 (64%) 2,168 9,378 (77%)
Exchange Gain (Loss), Net (140,138) (72,070) 94% (117,756) (5,620) 1995%
Monetary Position Gain (Loss) 233,306 255,377 (9%) 68,313 83,067 (18%)
Gain (Loss) on Marketable Securities (34,335) (324,448) (89%) 6,425 (246,704) N/A
Total Comprehensive Financing (Cost) Income (209,379) (348,840) (40%) (134,438) (248,426) (46%)
Other Expenses, Net (264,601) (281,004) (6%) (91,271) (73,894) 24%
----------------------------------------------------------------------------------------- ------------------------------------
Net Income Before Income Taxes 621,182 427,551 45% 179,012 31,675 465%
Income Tax (75,047) (49,911) 50% (23,133) (3,718) 522%
Employees' Statutory Profit Sharing (7,711) (8,876) (13%) (2,714) (3,528) (23%)
Total Income Tax & Profit Sharing (82,759) (58,787) 41% (25,847) (7,246) 257%
----------------------------------------------------------------------------------------- ------------------------------------
Net Income Before Participation
of Uncons. Subs. and Ext. Items 538,423 368,763 46% 153,165 24,429 527%
Participation in Unconsolidated Subsidiaries 17,133 21,417 (20%) 3,138 9,281 (66%)
Consolidated Net Income 555,556 390,180 42% 156,303 33,710 364%
Net Income Attributable to Min. Interest 27,027 34,386 (21%) 16,072 17,191 (7%)
MAJORITY INTEREST NET INCOME 528,529 355,794 49% 140,231 16,519 749%
----------------------------------------------------------------------------------------- ------------------------------------
EBITDA 1,572,962 1,504,406 5% 569,986 505,065 13%
Earnings per ADR 1.69 1.20 41% 0.43 0.05 699%
----------------------------------------------------------------------------------------- ------------------------------------
As of September 30
BALANCE SHEET 2003 2002 % Var.
---------------------------------------------------------------------------------------------------------------------------------
Total Assets 16,201,050 16,290,214 (1%)
Cash and Temporary Investments 408,678 336,316 22%
Trade Accounts Receivables 443,787 653,313 (32%)
Other Receivables 466,098 423,745 10%
Inventories 686,004 719,862 (5%)
Other Current Assets 92,017 127,206 (28%)
Current Assets 2,096,584 2,260,442 (7%)
Fixed Assets 8,906,298 8,817,613 1%
Other Assets 5,198,169 5,212,159 (0%)
-------------------------------------------------------------------------------------------
Total 8,829,701 9,150,072 (4%)
Liabilities
Current 2,730,423 3,558,761 (23%)
Liabilities
Long-Term Liabilities 4,254,781 4,031,981 6%
Other 1,844,497 1,559,330 18%
Liabilities
-------------------------------------------------------------------------------------------
Consolidated Stockholders' Equity 7,371,350 7,140,141 3%
Stockholders' Equity Attributable to
Minority Interest 1,173,812 1,210,705 (3%)
Stockholders' Equity Attributable to
Majority Interest 6,197,538 5,929,436 5%
--------------------------------------------------------------------------------------------------------------------------------
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Page 7
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Consolidated Income Statement & Balance Sheet
CEMEX S.A. de C.V. AND SUBSIDIARIES
(Thousands of Mexican Pesos in real terms as of September 31, 2003
except per ADR amounts)
January - September Third quarter
INCOME STATEMENT 2003 2002 % Var. 2003 2002 % Var.
---------------------------------------------------------------------------------------------------------------------------------
Net Sales 58,170,737 54,334,489 7% 20,178,018 18,934,257 7%
Cost of Sales (33,540,255) (29,916,465) 12% (11,476,558) (10,556,128) 9%
----------------------------------------------------------------------------------------------------------------------------------
Gross Profit 24,630,482 24,418,023 1% 8,701,460 8,378,129 4%
Selling, General and Administrative Expenses (12,583,701) (12,783,665) (2%) (4,249,518) (4,483,170) (5%)
----------------------------------------------------------------------------------------------------------------------------------
Operating Income 12,046,781 11,634,359 4% 4,451,941 3,894,959 14%
Financial Expenses (3,103,804) (2,710,661) 15% (1,029,466) (974,270) 6%
Financial Income 153,482 425,392 (64%) 23,844 103,181 (77%)
Exchange Gain (Loss), Net (1,541,519) (792,975) 94% (1,295,316) (61,833) 1995%
Monetary Position Gain (Loss) 2,566,361 2,809,870 (9%) 751,440 913,970 (18%)
Gain (Loss) on Marketable Securities (377,688) (3,569,856) (89%) 70,675 (2,714,451) N/A
Total Comprehensive Financing (Cost) Income (2,303,168) (3,838,231) (40%) (1,478,823) (2,733,403) (46%)
Other Expenses, Net (2,910,615) (3,091,849) (6%) (1,003,982) (813,041) 23%
----------------------------------------------------------------------------------------------------------------------------------
Net Income Before Income Taxes 6,832,999 4,704,279 45% 1,969,137 348,514 465%
Income Tax (825,519) (549,168) 50% (254,468) (40,912) 522%
Employees' Statutory Profit Sharing (84,825) (97,662) (13%) (29,850) (38,820) (23%)
Total Income Tax & Profit Sharing (910,344) (646,830) 41% (284,318) (79,732) 257%
----------------------------------------------------------------------------------------------------------------------------------
Net Income Before Participation
of Uncons. Subs. and Ext. Items 5,922,655 4,057,450 46% 1,684,819 268,782 527%
Participation in Unconsolidated Subsidiaries 188,464 235,646 (20%) 34,513 102,119 (66%)
Consolidated Net Income 6,111,119 4,293,095 42% 1,719,332 370,902 364%
Net Income Attributable to Min. Interest 297,296 378,343 (21%) 176,792 189,146 (7%)
MAJORITY INTEREST NET INCOME 5,813,823 3,914,753 49% 1,542,540 181,755 749%
----------------------------------------------------------------------------------------------------------------------------------
EBITDA 17,302,582 16,552,757 5% 6,269,844 5,557,154 13%
Earnings per ADR 18.62 12.22 52% 4.77 0.55 760%
----------------------------------------------------------------------------------------------------------------------------------
As of September 30
BALANCE SHEET 2003 2002 % Var.
----------------------------------------------------------------------------------------------------------------------------------
Total Assets 178,211,555 179,238,809 (1%)
Cash and Temporary Investments 4,495,457 3,700,438 21%
Trade Accounts Receivables 4,881,656 7,188,303 (32%)
Other Receivables 5,127,079 4,662,409 10%
Inventories 7,546,044 7,920,537 (5%)
Other Current Assets 1,012,183 1,399,624 (28%)
Current Assets 23,062,419 24,871,311 (7%)
Fixed Assets 97,969,278 97,018,886 1%
Other Assets 57,179,858 57,348,613 (0%)
-------------------------------------------------------------------------------------------
Total 97,126,708 100,676,900 (4%)
Liabilities
Current 30,034,653 39,156,526 (23%)
Liabilities
Long-Term Liabilities 46,802,590 44,363,294 5%
Other 20,289,466 17,157,081 18%
Liabilities
-------------------------------------------------------------------------------------------
Consolidated Stockholders' Equity 81,084,848 78,561,908 3%
Stockholders' Equity Attributable to
Minority Interest 12,911,932 13,321,205 (3%)
Stockholders' Equity Attributable to
Majority Interest 68,172,915 65,240,704 4%
--------------------------------------------------------------------------------------------------------------------------------
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translation methodology Page 3 and other important disclosures.
Page 8
[GRAPHIC OMITTED] CEMEX
Operating Summary per Country
In thousands of U.S. dollars
January - September Third quarter
----------------------- --------------------------
NET SALES 2003 2002 % Var. 2003 2002 % Var.
-------------------------------------------------------------------------------------------------------------------------------
Mexico 1,975,647 1,844,118 7% 663,249 632,599 5%
U.S.A. 1,272,641 1,344,018 (5%) 470,733 477,748 (1%)
Spain 848,220 689,015 23% 279,953 224,425 25%
Venezuela 223,085 214,857 4% 79,540 78,517 1%
Colombia 153,758 135,390 14% 58,702 49,441 19%
Egypt 93,296 110,867 (16%) 38,942 35,801 9%
Central America & the Caribbean region 435,521 360,882 21% 151,403 146,084 4%
Asia region 143,111 138,080 4% 45,214 38,362 18%
---------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations 142,970 100,992 42% 46,629 37,873 23%
---------------------------------------------------------------------------------------------------------------------------------
TOTAL 5,288,249 4,938,219 7% 1,834,365 1,720,850 7%
=================================================================================================================================
GROSS PROFIT
----------------------------------------------------------------------------------------------------------------------------------
Mexico 1,141,710 1,097,079 4% 389,576 364,881 7%
U.S.A. 397,605 479,102 (17%) 160,004 178,127 (10%)
Spain 300,854 261,775 15% 93,160 86,153 8%
Venezuela 103,366 103,718 (0%) 38,589 38,855 (1%)
Colombia 83,335 73,737 13% 31,341 27,402 14%
Egypt 40,274 43,220 (7%) 19,852 16,068 24%
Central America & the Caribbean region 136,820 120,046 14% 49,822 46,604 7%
Asia region 39,503 35,778 10% 12,434 7,314 70%
----------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations (4,334) 4,790 N/A (3,736) (3,953) (5%)
----------------------------------------------------------------------------------------------------------------------------------
TOTAL 2,239,135 2,219,245 1% 791,042 761,451 4%
==================================================================================================================================
OPERATING INCOME
----------------------------------------------------------------------------------------------------------------------------------
Mexico 790,543 739,242 7% 272,050 241,165 13%
U.S.A. 160,667 232,026 (31%) 73,971 87,727 (16%)
Spain 186,042 168,040 11% 57,037 53,806 6%
Venezuela 73,178 71,953 2% 28,205 28,065 0%
Colombia 60,325 56,063 8% 23,854 21,312 12%
Egypt 19,969 19,607 2% 11,953 8,247 45%
Central America & the Caribbean region 74,463 74,373 0% 28,283 27,521 3%
Asia region (8,893) (7,329) 21% (2,748) (7,156) (62%)
----------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations (261,132) (296,580) (12%) (87,882) (106,693) (18%)
----------------------------------------------------------------------------------------------------------------------------------
TOTAL 1,095,162 1,057,395 4% 404,722 353,995 14%
==================================================================================================================================
EBITDA
----------------------------------------------------------------------------------------------------------------------------------
Mexico 896,330 835,305 7% 307,823 273,865 12%
U.S.A. 270,650 337,197 (20%) 111,284 124,041 (10%)
Spain 240,007 208,642 15% 75,863 67,534 12%
Venezuela 108,735 102,866 6% 39,380 39,464 (0%)
Colombia 91,729 82,113 12% 35,627 30,761 16%
Egypt 41,698 48,549 (14%) 19,304 17,668 9%
Central America & the Caribbean region 101,818 93,212 9% 37,347 35,705 5%
Asia region 14,927 16,347 (9%) 5,074 478 962%
----------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations (192,931) (219,825) (12%) (61,715) (84,452) (27%)
----------------------------------------------------------------------------------------------------------------------------------
TOTAL 1,572,962 1,504,406 5% 569,986 505,065 13%
==================================================================================================================================
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translation methodology Page 3 and other important disclosures.
Page 9
[GRAPHIC OMITTED] CEMEX
Operating Summary per Country
As a percentage of net sales
January - September Third quarter
------------------------- -------------------------
OPERATING INCOME MARGIN 2003 2002 2003 2002
-------------------------------------------------------------------------------------------------------------
Mexico 40.0% 40.1% 41.0% 38.1%
U.S.A. 12.6% 17.3% 15.7% 18.4%
Spain 21.9% 24.4% 20.4% 24.0%
Venezuela 32.8% 33.5% 35.5% 35.7%
Colombia 39.2% 41.4% 40.6% 43.1%
Egypt 21.4% 17.7% 30.7% 23.0%
Central America & the Caribbean region 17.1% 20.6% 18.7% 18.8%
Asia region (6.2%) (5.3%) (6.1%) (18.7%)
-------------------------------------------------------------------------------------------------------------
CONSOLIDATED MARGIN 20.7% 21.4% 22.1% 20.6%
=============================================================================================================
EBITDA MARGIN
-------------------------------------------------------------------------------------------------------------
Mexico 45.4% 45.3% 46.4% 43.3%
U.S.A. 21.3% 25.1% 23.6% 26.0%
Spain 28.3% 30.3% 27.1% 30.1%
Venezuela 48.7% 47.9% 49.5% 50.3%
Colombia 59.7% 60.6% 60.7% 62.2%
Egypt 44.7% 43.8% 49.6% 49.4%
Central America & the Caribbean region 23.4% 25.8% 24.7% 24.4%
Asia region 10.4% 11.8% 11.2% 1.2%
-------------------------------------------------------------------------------------------------------------
CONSOLIDATED MARGIN 29.7% 30.5% 31.1% 29.3%
=============================================================================================================
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translation methodology Page 3 and other important disclosures.
Page 10
[GRAPHIC OMITTED] CEMEX
VOLUME SUMMARY
Consolidated volume summary
Cement: Thousands of metric tons
Ready-mix: Thousands of cubic meters
January - September Third quarter
----------------------------- ---------------------------
2003 2002 % Var. 2003 2002 % Var.
---------------------------------------------------------------------------------------------------------------------------------
Consolidated cement volume 48,466 46,216 5% 16,851 15,974 5%
Consolidated ready-mix volume 16,205 14,322 13% 5,568 5,046 10%
---------------------------------------------------------------------------------------------------------------------------------
Per-Country Volume Summary
January - September Third quarter
-------------------- Third quarter 2003 Vs.
DOMESTIC CEMENT VOLUME 2003 Vs. 2002 2003 Vs. 2002 Second quarter 2003
------------------------------------------------------------------------------------------------------------------------
Mexico 4% 1% (3%)
U.S.A. (1%) 3% 7%
Spain 5% 2% (8%)
Venezuela (23%) (11%) 8%
Colombia 4% 12% 21%
Egypt (9%) 1% 10%
Central America & the Caribbean region 15% 0% (8%)
Asia Region 1% (5%) (15%)
-------------------------------------------------------------------------------------------------------------------------
READY-MIX VOLUME
-------------------------------------------------------------------------------------------------------------------------
Mexico 14% 10% (1%)
U.S.A. 3% (1%) (7%)
Spain 6% 9% 2%
Venezuela (16%) (6%) (6%)
Colombia 35% 39% 31%
Central America & the Caribbean region 129% 26% (1%)
Asia Region N/A N/A N/A
-------------------------------------------------------------------------------------------------------------------------
EXPORT CEMENT VOLUME
-------------------------------------------------------------------------------------------------------------------------
Mexico (26%) (35%) (11%)
Spain (19%) (39%) (19%)
Venezuela 17% 37% (11%)
-------------------------------------------------------------------------------------------------------------------------
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translation methodology Page 3 and other important disclosures.
Page 11
[GRAPHIC OMITTED] CEMEX
PRICE SUMMARY
Third quarter 2003 Vs.
Third quarter 2003 Vs. 2002 Second quarter 2003
-------------------------------------- ----------------------------------
% Var. % Var. % Var. % Var.
DOMESTIC CEMENT PRICE U.S. dollar Local currency U.S. dollar Local currency
---------------------------------------------------------------------------------------------------------------------------
Mexico (1) (2%) 2% (5%) (1%)
U.S.A. (2%) (2%) (1%) (1%)
Spain 13% (1%) (2%) (1%)
Venezuela (1) 7% (6%) 1% (4%)
Colombia (2%) 4% (1%) (1%)
Egypt (6%) 25% 6% 9%
Central America & the Caribbean region (2) 1% N/A 7% N/A
Asia Region (2) 18% N/A 6% N/A
---------------------------------------------------------------------------------------------------------------------------
READY-MIX PRICE
---------------------------------------------------------------------------------------------------------------------------
Mexico (1) (5%) (0%) (3%) 1%
U.S.A. 0% 0% (0%) (0%)
Spain 13% (2%) (5%) (4%)
Venezuela (1) 20% 5% 4% (1%)
Colombia (0%) 5% 1% 2%
Central America & the Caribbean region (2) (6%) N/A (1%) N/A
Asia Region (2) (10%) N/A 3% N/A
---------------------------------------------------------------------------------------------------------------------------
1) Local currency price variation for Mexico and Venezuela is presented in constant currency terms as of September 30, 2003.
2) Volume weighted-average price.
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translation methodology Page 3 and other important disclosures.
Page 12
[GRAPHIC OMITTED] CEMEX
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 third quarter of 2003, second quarter of 2003 and third
quarter of 2002 are 11.00, 10.46 and 10.22 Mexican pesos per 1 U.S. dollar,
respectively. CEMEX's weighted average inflation factor between September 30,
2002 and September 30, 2003 was 7.66%.
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 September 30, 2003 and September 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 September 30, 2002 U.S. dollar figures for Mexico and Venezuela to
constant pesos and bolivars, respectively, as of September 30, 2003 it is
necessary to first convert the September 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.
September 30
---------------------------- Inflation rate
Exchange rate 2003 2002 factor
-------------------------------------------------------------------------------
Mexico 11.00 10.22 1.040
Spain 0.86 1.01
Venezuela 1,600 1,474 1.290
Colombia 2,889 2,828
Egypt 6.16 4.64
-------------------------------------------------------------------------------
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 do not include Panama and the Dominican Republic for presentation
purposes, but are now 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: 323.3 million for the third quarter of 2003 and 304.2
million for the third quarter of 2002; 312.3 million for the first nine months
of 2003, and 297.5 million for the first nine months of 2002.
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translation methodology Page 3 and other important disclosures.
Page 13
EXHIBIT 2
Media Relations Investor Relations Analyst Relations
Jorge Perez Abraham Rodriguez Jose Antonio Gonzalez
(52 81) 8888-4334 (52 81) 8888-4262 (212) 317-6008
CEMEX
Bulding the future (TM)
CEMEX ANNOUNCES NON-DILUTIVE
EQUITY OFFERING
MONTERREY, MEXICO, October 1, 2003 - CEMEX, S.A. de C.V. (NYSE: CX) announced
today that it and certain selling ADS holders intend, subject to market and
other conditions, to commence a public offering of 25.5 million of its
American Depositary Shares plus up to an additional 15% of that amount to
cover over-allotments. This transaction will not increase the number of shares
outstanding and thus will not dilute existing shareholders. Citigroup Global
Markets Inc. will act as global coordinator for the offering.
The ADSs are being offered in connection with the unwinding of several forward
contracts entered into between certain banks, including the selling ADS
holders, and CEMEX. The selling ADS holders will receive the proceeds of the
ADSs being sold by them in the offering, and have agreed to apply such
proceeds against amounts CEMEX is obligated to pay under their forward
contracts. The selling ADS holders have also agreed to remit to CEMEX any
proceeds they receive from the offering in excess of the amount necessary to
satisfy CEMEX's obligations under these forward contracts. As of September 30,
2003, the aggregate amount payable by CEMEX to the selling ADS holders under
their forward contracts was approximately U.S.$450 million. The proceeds of
the sales of the ADSs being offered by CEMEX will be applied against amounts
CEMEX is obligated to pay under other forward contracts, with any excess due
to CEMEX.
Subject to market conditions, CEMEX intends to use a portion of the net
proceeds available to it to conduct a cash tender offer for all or a portion
of its outstanding appreciation warrants, including appreciation warrants
represented by American Depositary Warrants (NYSE: CX.WSB). However, CEMEX is
under no obligation to proceed with the appreciation warrant tender offer.
CEMEX intends to use the remaining portion of the net proceeds available to it
from the offering for general corporate purposes, including the repayment of
debt.
Rodrigo Trevino, Chief Financial Officer, said: "This non-dilutive equity
offering is in line with our objectives and stated financial strategy. We
believe this is an important step and one of several that we have taken during
the course of the year to simplify our capital structure."
Shelf Registration Statements relating to these securities have been filed
with the Securities and Exchange Commission and are effective. This
announcement shall not constitute an offer to sell or the solicitation of an
offer to buy, nor shall there be any sale of these securities in any state in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state.
The offering is made solely by prospectus. Copies of the prospectus supplement
and prospectus, when available, may be obtained from the Prospectus department
of Citigroup Global Markets Inc. at the following address:
Brooklyn Army Terminal
140 58th Street
Brooklyn, NY 11220
Tel: (718) 765-6732
Fax: (718) 765-6734
CEMEX is a leading global producer and marketer of cement and ready-mix
products, with operations primarily concentrated in the world's most dynamic
cement markets across four continents. CEMEX combines a deep knowledge of the
local markets with its global network and information technology systems to
provide world-class products and services to its customers, from individual
homebuilders to large industrial contractors. For more information, visit
www.cemex.com.
This press release contains forward-looking statements and information that
are necessarily subject to risks, uncertainties and assumptions. The proposed
ADS offering and cash tender offer for the appreciation warrants are dependent
upon market conditions, which are subject to change. In addition, many factors
could cause the actual results, performance or achievements of CEMEX to be
materially different from those expressed or implied in this release,
including, among others, changes in general economic, political, governmental
and business conditions globally and in the countries in which CEMEX does
business, changes in interest rates, changes in inflation rates, changes in
exchange rates, the level of construction generally, changes in cement demand
and prices, changes in raw material and energy prices, changes in business
strategy and various other factors. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described herein. CEMEX assumes
no obligation to update or correct the information contained in this press
release.