CEMEX, S.A.B. de C.V. (NYSE:CX) Q3 2023 Earnings Call Transcript

A lot of these investments, as they get completed within the next couple of years, we’re expecting them to contribute steady state close to $600 million to EBITDA. So serious contribution to all of these investments and marginally, they are representing a huge part of the incremental improvement in our EBITDA. Now, when we see that, we take a look at what are the other possibilities for capital deployment? I mean, one is you can buy back debt. Today, our debt is yielding 7% and on an MPB basis, doesn’t compete at all with capital allocation to these projects. We can buy back stock, which today our cost of equity is about 15%. And again, does not compare very well to invested capital at 40 plus percent for very long periods of time. These are long projects that are expected to go for many, many years.

These are not short-term projects that we’re doing. So when you take a look at capital allocation, really investing in our business at a creative manners, like we’re saying right now, is really what shareholders pay us to do. And that’s what we intend to do. And of course, we’re making sure that we keep an eye on capital structure, making sure that we get investment grade. Getting investment grade means that we get it, we keep it, maybe improve on it, as time goes by. But that kind of gives you an idea. And of course, Fernando mentioned the possibility of returning cash to shareholders in terms of dividends. And that’s something, that definitely to consider and it should enhance our total shareholder return in the long term. But that should kind of in a nutshell give you our thinking about capital allocation and why and where we are doing it.

And I hope, I don’t know Lucy, if there’s anything else you’d like to add.

Lucy Rodriguez : No, I think you two covered it, thank you. So with that, we appreciate you joining us today for our third quarter webcast and conference call. If you have any additional questions, please feel free to contact the Investor Relations team. And we will look forward to seeing you all again for our fourth quarter webcast that will take place on February 8th. Many, many thanks.

Operator: Thank you for your participation in today’s conference. This concludes the presentation and you may now disconnect. Have a lovely day.

Lucy Rodriguez : Thank you, operator.