Longtime readers of TPTM (all three of you) will note that Cemex has attracted some small controversy in these great United States as well as Venezuela. But since Puerto Rico seems to have reconciled itself to vasty plumes of tire smoke floating across its southern shore, Venezuela is where the Cemex action is at these days.
So, how much are Cemex's assets in Venezuela worth? Priceless, if this publicity still from El Economista is to be believed:
More seriously, according to today's El Economista, Venezuelan operations generated about 4% of Cemex's earnings before interest, taxes, depreciation and amortization. In 2007, Cemex earned US$ 4.6 billion before interest, taxes, depreciation and amortization. Four percent of that number is US$ 183 million.
Cemex as a whole earned US$ 3.22 per ADR. It's price/earnings ratio varied between 8 and 13 over the course of 2007; it's 12-month P/E is currently down to 6.2.
In other words, a simply back-of-the-envelope calculation puts the value of Cemex's operations in Venezuela between 183m × 6.2 = US$ 1.14 billion, and 183m × 13 = US$ 2.38 billion.
Since that 6.2 measure already embodies market belief in rising political risk and the recent run-up in input costs, I'd have to say that the US$ 1.3 billion value claimed by Cemex sounds pretty conservative.
Caracas probably shouldn't have taken on Monterrey so cavalierly. Nobody should take on Monterrey so cavalierly. Monterrey is a tough town, and businesses from Monterrey are tough businesses. They've seen this sort of thing before, and they've come out ahead.
In this particular fight between the cowboys of the northern deserts and the cowboys of the southern plains, my money is on the regiomontanos of the northern desert.
Cool picture! Is that supposed to be the bridge between La Guaira and Caracas that collapsed more than two years ago?
Posted by: Leticia | August 25, 2008 at 03:20 PM
The collapsed viaduct is now back up and running. (I know --- I just drove it!) They put it back up amazingly fast.
I don't remember a view like that from the airport viaduct, so I'm not sure. .
Something about the photo doesn't look right, but do you think that El Economista would steer us wrong?
Posted by: Noel Maurer | August 25, 2008 at 03:25 PM
You are right, the collapsed viaduct was not by the sea, I just checked the picture I took when I was going from La Guaira to Caracas (which was exactly one day after the viaduct was closed to traffic and while I was there it collapsed completely).
Posted by: Leticia | August 26, 2008 at 03:01 AM
Oh, gosh. I've driven the one-lane road up into the hills that handled the traffic while the viaduct was down. How many days it take you to get back to Maquetia?
Posted by: Noel Maurer | August 26, 2008 at 08:11 AM
It depended on traffic, my experience was two or three hours. Some people were stuck there for hours on end (which reminds me to Cortazar's short story _La autopista del sur_, without a proper autopista of course). I have really cool pictures of the viaducto before and after the collapse.
Posted by: Leticia | August 26, 2008 at 08:29 AM
Send the collapse pictures along! I'd love to post 'em here.
Posted by: Noel Maurer | August 26, 2008 at 08:41 AM
Before and after, of course.
Posted by: Noel Maurer | August 26, 2008 at 08:41 AM