Another one bites the dust: Nationalized Cemex Venezuela loses money in first semester

August 19, 2010

Continuing with the Terminator policies of destroying the country’s infrastructure, Cemex Venezuela, nationalized by Hugo Chávez two years ago, announced that the company had lost Bs. 78 million in the first half of 2010.

Way to go Hugo!

To give this some perspective the last time that Cemex reported financials was in 2007 (It was taken over in 2008) and that year the company made Bs. 277 million. In fact these are the profits the last four years of operations under private management:

2004 223 million Bs.

2005 370 million Bs.

2006 336 million Bs.

2007 277 million Bs.

The explanation for this negative result?

Everything really, from lower cement production, to lower cement sales, to higher costs, to distribution problems, you name it.

In only two years, the revolution has taken a well managed cement operation with unique competitive advantages into an operation with loses.

Cemex México has taken the Venezuelan Government to arbitration over the nationalization of its affiliate.

17 Responses to “Another one bites the dust: Nationalized Cemex Venezuela loses money in first semester”

  1. It sounds like you’re creating issues yourself by attempting to solve this problem instead of looking at why
    their is really a problem within the initial location

  2. Anonymous Says:

    […] Und die gleichen Probleme hat Venezuela seit die mit den Kubaner zusammenarbeiten. Siehe hier zum Bsp., die Meldung ist von gestern. […]

  3. jama Says:

    Any business has key success factors that most be pursued, naturally in a society that Hugo Chavez, as Fidel Castro has done in Cuba, people has quiet different motivators, which get them into poor results and self destruction. It is a pitty that the people of Venezuela are being taken into this path at a higher speed, can’t we learn from Cuba disaster? More sooner that later Venezuela would be there. Sorry for this good people, venezuelans, react now or be condemned for ever.

  4. island canuck Says:

    Yes, Smartmatic

  5. Hans Says:

    Hi @ all,
    does someone know what voting computers will be used?

    Regards Hans

  6. An Interested Observer Says:

    All those surprised, please raise your hand. Marc Weisbrot, you’re a liar, so put it down.

    The movie poster is clever, but very wrong. “IT’S NOTHING PERSONAL.” It’s always personal with Hugo. Not necessarily about his target, but making himself the center of attention.

  7. Kepler Says:

    Hugo has also said something about the new Ley de Inquilinato. Do you know what the details are? Probably something about no increases, nobody can be thrown out even if they don’t pay in a decade…if you become a squatter, you are protected by law to remain there for the next ten years, after which you can own the place…or something like that.

  8. concerned Says:

    Off Topic, from Veneconomy:

    “Drill election on Sunday
    will be held in 2,976 voting stations, 52 of which will be used as pilot centers. This will allow testing the technological platform, the automated voting system, logistics and functioning of stations for the legislative elections.”

    Does anyone else see this as a way of “testing” the system and retaining the vote count for additional votes on the 26th?

  9. Odette Foster Says:

    To: Island Canuck: how… I smoke a lot and laugh a lot. ( at him, not the situation )
    He just said that he now is going after ALL Insurance companies “ with both hands “.
    This allows me to make sure none of my Mutuals, RSPs etc are vested in Multi Nationals that have exposure in VE. After the recent fiasco I can not afford another 50% reduction
    in my retirement… otherwise I will just have to die early.

    Friends close ….. enemies… closer ..

  10. island canuck Says:

    “I will now go back to hearing HFC in Cadena”

    Just a question.

    How can you watch him? 30 seconds is too much for me.


  11. Odette Foster Says:

    I have never blogged here although I have been following for a few years. Mostly because everything I feel or think is already said. ( Great minds think alike ) I therefore would first like to thank the host for providing this window.
    With respect to Cemex, I would like to add that it was not just the overall contraction of the GDP that affected the bottom line. Contrary to belief margins in this industry are small therefore the difference of 2 or 3 points makes a difference. The extra demand in the Asia market was able to minimize the impact on bottom line but the reduction in exchange values, stock value and the new tax laws in Mexico (this forced recalculation
    of tax at 2pnts higher than previous) all compounded, woops there it is. They also appeared to have ( losses ) in reserve and chose to expense at this time to min. tax and increase liquidity. I admire that they refinanced short-term for long term and bought back stock and were still able to maintain overall stockholders equity.
    What was most notable was that the Value of the Cemex Ve actually went up. That is a heck of a legal bill.

    All factors that HCF would most likely not understand, not face and or lie about when it comes to the VE operations.

    What I do know for a fact is that there is no production of cement worth mentioning in VE now. Even offering 60BvF for a bag of Portland ( white ) to do some repairs ( I needed 3 bags ) I could not get it on the Island. If what ROY said is true and quality has decreased then VE is exporting nothing. There are Inter’nl building codes that must be
    adhered to and the MPA of all product is tested before installed.

    I will now go back to hearing HFC in Cadena… perpetually.. he is talking about reducing the cost of housing… its to expensive for him… evil of capitalism… uhu

  12. moctavio Says:

    Cemex’s Mexico’s problems arise from different circumstances, incluidng the company buying many cement companies and borrowing for it and the drop in housing worldwide. Such circumstances did not occur in Venezuelawhere companies have regional advantages and construction has not dropped as much. In fact, Cemex Venezuela makes more money in Venezuela than abroad as the price of cement is higher. Lower eranings could eb justifed in terms of the GDP contraction. But there is no way to justify losses other than mismanagement.

  13. Jorge Says:

    Could it be wise to compare the financial results of other companies in the same period?
    In this report: it says that previous mother company CEMEX has also loss 641 mln $ for the same period.

  14. Roy Says:

    Also worthy of note: The quality of the cement produced in Venezuela has fallen so much, constructors need to use 50% more to get the same strength of concrete as before. Or they use the same amount as before and produce structures that are deficit.

    Personally, I wouldn’t buy apartments in any building built since 2008. Word to the wise…

  15. gd Says:

    Great we can now add this revolutionary achievement to those of the nationalized Electricidad de Caracas, CANTV and others. Yes, way to go Hugo!

  16. Roy Says:

    Ah, the old Reverse Midas Touch. Everything he touches turns to s__t!

  17. Fidel's non-evil twin Says:

    “Everything really, from lower cement production, to lower cement sales, to higher costs, to distribution problems, you name it.”

    There’s also the tiny, itsy-bitsy detail that CEMEX has become “Tascon List part 2: Electric IScrewYou”.

    According to my sources, CEMEX won’t sell a thing to any company that it doesn’t deem revolutionary enough, and yes, if the owner is on Tascon’s list, he won’t be getting any cement from them.

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