GCC reports increase in sales in Mexico and the U.S. during the third quarter of 2022

CHIHUAHUA – The Mexican company Grupo Cementos de Chihuahua (GCC) reported an 11.8% increase in consolidated net sales during the third quarter of 2022, while sales in the United States showed an increase of almost 10.4%.

According to GCC’s financial report, during the third quarter of the year, consolidated net sales increased by 11.8% to US$352.8 million, compared to US$315.4 million obtained in the same period of 2021.

The company reported that the increase is the result of higher cement and ready-mix volumes in the United States, higher ready-mix volumes in Mexico, as well as a favorable pricing environment in both countries. The company’s cumulative consolidated net sales increased 12.7% to US$879.8 million, while EBITDA increased 12.7% to US$879.8 million.

In the United States, sales represented 76% of consolidated net sales in the third quarter and increased 10.4% to US$269.1 million. GCC explained that this was mainly due to an increase in cement volumes of 2.2%, an increase in ready-mix volumes of 7.7%, and an increase in cement and ready-mix prices of 12.2% and 4.2%, respectively.

Sales in the United States increased 13.3% to US$642.3 million, mainly due to a 5.4% and 5.2% increase in cement and ready-mix volumes, respectively, and an 11% and 1.9% increase in cement and ready-mix prices.

In Mexico, sales represented 24% of consolidated net sales and increased 16.8% to US$83.7 million in the third quarter of 2022. This result was driven by a 2.4% increase in ready-mix volumes and a 13.5% and 7.9% increase in cement and ready-mix prices, respectively. This was partially offset by a 3.2% decrease in cement volumes.

“Once again, we delivered an outstanding performance. Our third quarter results reflect the fact that GCC continues to successfully mitigate the impacts of high inflation, as well as industry and market headwinds. Our competitive advantages ensure the smooth operation of our plants and the availability of product for our customers, despite the limited supply of cement,” said Enrique Escalante, GCC’s Chief Executive Officer.

The main contributors to sales in Mexico during the quarter include demand related to the residential sector and the construction of maquiladora plants and industrial warehouses.

Sales in Mexico increased 10.9% to US$237.5 million, mainly driven by an 8.2% increase in ready-mix volumes and increases of 12.5% and 8.1% in cement and ready-mix prices, respectively. This was partially offset by a 3.4% decrease in cement volumes.

Cost of sales totaled US$236 million in the third quarter of 2022 and represented 66.9% of consolidated net sales, compared with 65.5% in the third quarter of 2021, an increase of 1.4 percentage points. This increase was mainly due to higher production costs, an increase in fuel prices in Mexico, as well as higher freight costs and an unfavorable sales mix.

Likewise, cost of sales represented 69.3% of sales; an increase of 1.1 percentage points compared to the same period of 2021, resulting from the same reasons that impacted the third quarter of 2022.