(Recasts first paragraph; adds comments on Mexico's electricity
reform bill, Mexican exports to U.S.)
MEXICO CITY, Oct 7 (Reuters) - Mexican concrete giant Cemex
said on Thursday that supply chain snags and project delays will
squeeze its full-year operating profit, even as it plans
double-digit U.S. price hikes to offset higher costs.
Together with inflation and foreign exchange effects, the
snags and delays could hit earnings this year by around $100
million, its chief executive said in a presentation for
investors and analysts.
"What has changed is inflation. We thought we were going to
have inflation, but not as much as we've seen, particularly
fuels, electricity, maritime transportation in particular,"
Chief Executive Fernando Gonzalez said.
"We are increasing prices on a much more frequent basis."
Cemex will report third-quarter results at the
end of the month with more detailed information on the impact to
earnings before interest, taxes, depreciation and amortization
(EBITDA), Gonzalez said, adding that the company was also aiming
to delay costs and some investments.
"There is a scarcity of certain goods," he said. "We've
needed to buy at spot prices... that's more expensive than we're
prepared to spend."
Jaime Muguiro, president of Cemex's U.S. operations, said
the company would hike U.S. prices by double-digits throughout
the coming year, in part to offset higher energy and shipping
He praised a $1 trillion bipartisan infrastructure bill
under consideration by U.S. lawmakers, saying the $550 billion
increase in funding for projects such as bridges, highways and
transportation would have a positive impact on demand.
Cemex also projected spending $410 million in capital
expenditures in the United States, one of its key markets, over
the next three-to-four years, Muguiro said.
In Mexico, Cemex's third-biggest market, the company is
analyzing the potential implications of a proposed electricity
and how it could impact Cemex's climate goals.
The bill would boost state control of the electricity market
and set limits on private sector involvement, including
companies that produce renewable energy.
Ricardo Naya, the head of Cemex's Mexico unit, said Cemex
currently sources just 30% of its energy from the state-run
Comision Federal de Electricidad (CFE).
Naya also noted that cement exports to the United States are
on track to hit a record this year, outdoing the past high from
(Reporting by Daina Beth Solomon and Cassandra Garrison;
Editing by Marguerita Choy, Christian Plumb and Dan Grebler)