Despite a Challenging Environment, Profits May Have Improved Significantly

Positive results potentially maintaining a recovery trend. The companies efforts to optimize its asset portfolio continue, resulting in positive results, which will help to partially mitigate cement demand contraction, which remains negatively affected by higher interest rates (hurting cement demand performance in the residential sector). In the US, the housing sector has presented a significant contraction in 2025. In October (latest figures), building permits decreased 1.1% YoY and –0.2% MoM, while housing starts decreased 8% YoY and –5% MoM.

The sector's total revenues in 4Q25 are projected to increase 5% YoY, while total EBITDA may rise 14% YoY, driven mainly by the company's cost-control initiatives. CEMEX may post the highest EBITDA growth, with a 15% YoY gain (in line with the company's estimates). On the other hand, GCC's EBITDA may post a 10% YoY gain, improving on the latest figures reported in 3Q25. We note that the sector's solid financial position will remain strong, with low leverage debt ratios.

We reiterate our positive outlook for the sector. Current prices offer attractive upside potential for long-term investors, supported by attractive potential upside to our new PT. Our Outperform rating is reiterated for CEMEX and GCC, while our 12M price target for CEMEX was raised to P$28.0 from P$27.0, and GCC's PT is up to P$229.0 from P$223.0 per share.