Cemex 1997 Annual Report Download - page 6

Download and view the complete annual report

Please find page 6 of the 1997 Cemex annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 80

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80

4
Based on these criteria, we analyzed sever-
al transactions in South America, Eastern
Europe and Southeast Asia over the past
year. Of these, we selected a less capital-
intensive, strategic investment in the
Philippine cement market. Specifically, we
acquired a 30% equity stake in Rizal
Cement, the Philippines’ second-largest
cement maker.
The Rizal Cement deal is a good example
of how we can make selective acquisitions at
much higher returns than in the past. This
transaction is not just a prudent long-term
investment, but our technical assistance and
consulting fees also provide a natural hedge
against regional risk. In return, Rizal Cement
enjoys the benefits of the CEMEX system,
including increased purchasing power, logis-
tical savings and multiple other ways to gen-
erate greater value for its stakeholders.
In 1997, we took important steps to align
management’s interests with your own.
Through our stock-based compensation pro-
gram, all of CEMEX’ senior management
have a stake in the company’s financial suc-
cess. Through these and other initiatives, we
have worked hard to recognize and reward
our most important asset, our human capital.
We have also worked hard to build on our
core business fundamentals: Low operating
costs; Core cement, ready-mix concrete and
aggregates base; State-of-the-art information
systems and production technology;
Aggressive yet prudent financial management
and capital structure; Emerging-market
focus; and Management expertise, culture and
philosophy. We manage our business with you
in mind, and we are doing our best to make
our performance more predictable to you.
Finally, I thank you, my fellow sharehold-
ers, for the trust you have placed in our abil-
ity to create consistent growth and returns.
For, with your support, we can achieve our
mission of becoming the world’s most effi-
cient and profitable multinational cement
company.
Lorenzo H. Zambrano
Chairman of the Board and
Chief Executive Officer
Interest coverage vs.
market capitalization
Stronger financial position
CEMEXÕ interest coverage is 2.4
times, a five-year high.
93 94 95 96 97
12
10
8
6
4
2.5
2.0
1.5
1.0
0.5
0.0
2
0
Interest coverage
(times)
Capitalization
(millions of dollars)