CEMEX Gets Extension of Contract

The international supplier of building materials CEMEX, S.A.B. de C.V. (CEMEX) received an extension of the initial contract to supply 350,000 cubic meters of ready-mix concrete for the new Hamburg-Moorburg power plant.

The company began delivering building materials to Hamburg-Moorburg from April 2008 and has already produced roughly 310,000 cubic meters of ready-mix concrete. CEMEX produced the ready-mix concrete at the construction site using two mobile mixing plants, having a combined hourly production capacity of about 200 cubic meters.

The coal-based Hamburg-Moorburg power plant will have a total production capacity of 11 billion kilowatt hours of electricity a year that is sufficient to meet the electricity needs of Hamburg City. The plant will come into operation from 2012.

Earlier, in July 2010, CEMEX won a major supply contract to supply 500,000 tons of cement for the Panama Canal expansion project.

During second-quarter 2010, the ready mix concrete volume declined to 13,530 thousand cubic meters from 14,226 thousand cubic meters in the year-ago quarter. The company expects ready mix volumes to show a low-to-mid, single-digit decline from the 2009 levels.

The adjusted earnings of CEMEX at the end of second-quarter 2010 were 29 cents per ADS compared with 23 cents per ADS in the year-ago comparable quarter. The Zacks Consensus Estimates for fiscal year 2010 and fiscal year 2011 are a net loss of 55 cents per ADS and net earnings of 10 cents per ADS, respectively.

CEMEX currently retains a Zacks #4 Rank (short-term Sell rating). We presently maintain a Neutral rating on the stock.

Mexico-based CEMEX, through its subsidiaries, engages in the production, marketing, distribution, and sale of cement, ready-mix concrete, aggregates, and other construction materials. It sells its products primarily to distributors in the construction industry.