GCC S A B de C V (GCC) Q3 2024 earnings summary

Executive summary

• Q3 2024 EBITDA rose 2.3% to $162.1 million, achieving a record 40.7% margin, driven by proactive cost management and sustainability initiatives.

• Net income increased 1.5% year-over-year to $107.3 million, with earnings per share up 1.2% to $0.3276.

• Safety initiatives led to a 25% reduction in recordable injuries over the last 12 months, and over 9,000 hours of employee training were delivered year-to-date.

• Sustainability advanced with blended cements at 73% of sales and a 2.5% year-to-date reduction in CO2 intensity per ton.

• Celebrated 83rd anniversary, reinforcing commitment to long-term vision and operational excellence.

Financial highlights

• Q3 2024 consolidated net sales decreased 4.3% year-over-year to $398.2 million, mainly due to lower volumes; U.S. sales grew 0.7% to $301.7 million, while Mexico sales fell 17.2% to $96.5 million.

• Free cash flow for Q3 was $121.5 million with a 75% conversion rate; nine-month free cash flow surged 51.6% to $192.0 million.

• Ended Q3 with $897 million in cash and a net debt to EBITDA ratio of -0.81x; total debt stood at $500 million, all long-term and USD-denominated.

• Operating income before other expenses increased 1.4% to $137.5 million.

• Net financial income for Q3 was $11.2 million, up 16.7% year-over-year.

Outlook and guidance

• Concrete volumes in both the U.S. and Mexico are expected to fall short of full-year guidance due to weather, project delays, and market uncertainty.

• U.S. cement demand showed signs of stabilization in September, with daily shipments in October up 5% over September.

• Anticipates demand recovery as interest rates decline and expects oil well cement demand to remain strong into 2025.

• Margins are expected to remain strong or improve in 2025, supported by price increases and ongoing cost initiatives.

• Odessa plant expansion to come online in 2026, aligning with anticipated federal infrastructure funding.