2001-12-31_REPORT - M2002004

• Permit No: M2002004
• IBM Index Class Name: REPORT
• Doc Date: 12/31/2001
• Doc Name: 2001 Annual Report
• From: GCC
• To: DMG
• Media Type: D
• Archive: No

Grupo Cementas de Chihuahl-ta
* GCC
• Cement sales volume in United States grew 30.0%.
• Concrete block sales increased by 30.5%.
• GCC achieved a reduction in fixed costs of 12.5%, before the consolidation of GCC Dacotah.
• Net financial expenses were $15.8 million pesos, 10.7% lower than in 2001.
During the first quarter of 2002, GCC increased its
total cement volume sold by 1.8% compared to the
same quarter of 2001. Grupo Cementos de
Chihuahua's net sales in the first quarter of 2002
totaled $652.0 million pesos, 11.4% lower than sales
obtained during the first quarter of last year due to the
following factors: fewer working days due to the Holy
Week and a lower public and private economic activity
in the domestic market where we participate.
Fortunately, the economy of this market began to show
signs of recovering, so we expect that the volume sales
for our products will begin to recover during the second
quarter.
Even so, due to the start up of operations of the
fuel substitution project at the Samalayuca plant and to
the constant cost reduction program, we achieved a
decrease in the production costs and selling and
general administrative expenses of 14.3% and 9.2%,
respectively, before consolidating GCC Dacotah's
costs.
Operating income and EBITDA would be increased
with the expected sales improvement and the variable
production cost reduction at the Chihuahua cement
plant with the start up of operations of the fuel
substitution project.
During the first quarter of 2002, 62.5% of the
company's sales were made in the Mexican market
($407.5 million pesos). The sales breakdown was as
follows: 47.6% in cement and masonry, 25.8% in
ready-mix concrete, 9.7% in concrete block, 3.9% in
aggregates and 13.0% in other products like plaster
gypsum and other construction materials.
GCC made 37.5% of the company's quarterly sales
in the United States (US$27.1 million, equivalent to
$244.5 million pesos). Annual sales growth was 15.8%
due for the most part to an increase in cement sales.
The sales breakdown was: 88.5% in cement and
masonry, and 11.5% in ready-mix concrete.
Operating income in the first quarter of 2002 was
$134.9 million pesos, 31.5% lower than the same
quarter of 2001. This outcome came as a consequence
of lower sales in the Mexican market, a higher
depreciation by including GCC Dacotah assets, as well
as by the general maintenance programs made at the
cement plants.
The operating cash flow (operating income plus
depreciation and amortization or EBITDA) was $207.9
million pesos, a reduction of 31.5% compared to the
first quarter of 2001. This represented 31.9% of sales.
In spite of lower sales in the Mexican market, this
margin was just 3 percentage points lower than the
margin obtained during the first quarter of 2001.
Net financial expenses (interest expense minus
interest income) reported during the quarter were $15.8
million pesos, a decrease of 10.7% compared to the
first quarter of 2001, due to a lower company debt and
a reduction in interest rates. GCC's net interest
coverage (EBITDA divided by net financial expenses)
was 9.8 times.
Financial expenses were lower than the income
from monetary position during the first quarter of 2002.
As a result, there was a ret comprehensive financing
income for $13.1 million pesos. Comparatively, during
the same period of last year, GCC reported a
comprehensive financing cost of $7.3 million pesos.
2
['!?GCC