GCC, S.A.B. de C.V.

GCC reported first-quarter sales of $295 million, up 19.8% year over year. EBITDA was $87 million, up 18.3%, with EBITDA margin of 29.5%. In the U.S., revenues increased 15.9%, cement volumes rose 10.6%, and concrete volumes rose 15.9%; cement pricing declined 2.6%. In Mexico, revenues increased 28.2%, cement volumes rose 12.8%, and concrete volumes rose 5.9%. Cost of sales as a percentage of sales increased by 70 basis points, SG&A rose by $3 million, free cash flow was negative $10 million, capex was $38 million, cash and equivalents were $857 million, and net debt-to-EBITDA was negative 0.47x. Management left full-year guidance unchanged, including $200 million of growth CapEx and $70 million of maintenance CapEx, and said margin pressure should persist in Q2 before normalizing in the second half.

Enrique Escalante framed Q1 as a strong start built on favorable weather, strong project activity, and GCC’s flexible network. He emphasized the company’s ability to allocate volumes where demand is strongest, citing momentum in infrastructure, wind, ready-mix, and growing interest in data centers, while noting residential remains under pressure in the U.S. He was upbeat on Mexico, where he said activity improved across housing, self-construction, infrastructure, and industrial, but stayed disciplined and said the full-year outlook is unchanged.

Maik Strecker highlighted the core financial results and the drivers behind them: sales of $295 million, EBITDA of $87 million, margin of 29.5%, and negative free cash flow of $10 million due mainly to working capital and higher cash taxes. He said cost of sales rose 70 basis points from higher fuel and power costs, lower oil well contribution, and transfer freight tied to Odessa ramp-up and the new terminal, while SG&A increased by $3 million from peso appreciation and salary adjustments. He also reiterated capex guidance of $70 million maintenance and $200 million growth, noted $5 million returned via buybacks, and pointed to a strong balance sheet with $857 million of cash and a net debt-to-EBITDA ratio of negative 0.47x.

Analysts focused on the impact of the war and higher freight/fuel costs, the ready-mix outperformance, U.S. margin pressure, capex pacing, and whether GCC is gaining market share ahead of Odessa. Management said the conflict is adding cost inflation and freight pressure, but that fuel surcharges, product mix, and GCC’s network help offset some of it; they also said imports are still likely to remain part of the industry despite higher ocean freight. On Odessa, they said Q2 will still see extra logistics costs, with normalization starting in Q3, and they stressed that the U.S. cement volume strength is more about project work than market-share grabbing.