Cemex: EBITDA margin 19.3% in Q1 2026, but cash flow falls short of investments

Cemex reported first-quarter 2026 results: revenue of $4,019.0 million, EBITDA of $794.0 million, and net profit of $228.0 million. Against this backdrop, the shares look rather unattractive: the EV/EBITDA multiple of 7.11 exceeds its own three-year average (5.78), and the portal's model points to a 7% downside.

Key takeaways

— Revenue in Q1 2026 was $4,019.0 million, down 3.4% year-over-year, due to weak demand in key regions

— EBITDA margin of 19.3% in Q1 2026 is lower than the previous quarter, due to higher energy and logistics costs

— Net profit in Q1 2026 was $228.0 million, down 12% year-over-year, due to one-off losses from exchange rate differences

— Operating cash flow in Q1 2026 was $141.0 million, which does not cover capital expenditures of $145.0 million, indicating a free cash flow deficit

— Net debt at the end of Q1 2026 was $2,635.0 million, corresponding to 1.02 EBITDA over the last twelve months

— Dividend yield over the last twelve months is 0.95%, below the average historical yield, and payments may be at risk due to weak cash flow

— Shares trade at an EV/EBITDA multiple of 7.11, above the three-year average of 5.78, and the portal's model estimates a 7% downside

Attractiveness

Key figures, USD bn

Revenue in Q1 2026 was $4,019.0 million, down 3.4% year-over-year, due to weak demand in key regions

In Q1 2026, Cemex's revenue was $4,019.0 million, down 3.4% year-over-year. The decline is attributed to weaker demand for cement and construction materials in key regions, particularly the US and Europe, where construction activity remains sluggish.

Despite the revenue decline, the company maintains its market leadership, but growth has slowed. This reflects the broader trend in the construction sector, which faces high interest rates and reduced infrastructure investment.

EBITDA margin of 19.3% in Q1 2026 is lower than the previous quarter, due to higher energy and logistics costs

EBITDA for Q1 2026 was $794.0 million, corresponding to a margin of 19.3%. This is lower than the previous quarter, due to higher energy and logistics costs that could not be fully offset by price increases.

The decline in margin reflects pressure on operational efficiency. The company is trying to optimize costs, but external factors such as energy prices remain volatile.

Net profit in Q1 2026 was $228.0 million, down 12% year-over-year, due to one-off losses from exchange rate differences

Net profit for Q1 2026 was $228.0 million, down 12% year-over-year. The main reason was one-off losses from exchange rate differences, related to volatility in emerging market currencies.

Operating profit for the quarter was $453.0 million, indicating healthy operational performance, but net profit was lower due to non-operating factors. These one-off losses do not reflect the core business but impact the bottom line.

Operating cash flow in Q1 2026 was $141.0 million, which does not cover capital expenditures of $145.0 million, indicating a free cash flow deficit

Operating cash flow for Q1 2026 was $141.0 million, while capital expenditures reached $145.0 million. Thus, free cash flow was negative, meaning the company could not fully fund its investments from operations.

This deficit was covered by increasing debt, leading to a rise in net debt of RUB 2.5 billion compared to the previous reporting date. Although the company maintains its investment cycle, the lack of positive free cash flow may limit its ability to pay dividends and reduce leverage.

Net debt at the end of Q1 2026 was $2,635.0 million, corresponding to 1.02 EBITDA over the last twelve months

At the end of Q1 2026, Cemex's net debt was $2,635.0 million, corresponding to a ratio of 1.02 to EBITDA over the last twelve months. This is a moderate level of leverage, which does not raise immediate concerns but leaves limited headroom.

Over the last twelve months, net debt increased by RUB 0.6 billion, reflecting the need to finance capital expenditures and the free cash flow deficit. The company retains access to credit markets, but further debt growth could increase pressure on financial stability.

Dividend yield over the last twelve months is 0.95%, below the average historical yield, and payments may be at risk due to weak cash flow

Over the last twelve months, Cemex paid dividends providing a yield of 0.95% at the current share price. This is below the average yield over recent years, reflecting the company's cautious dividend policy amid uncertainty.

Payments for the current year, in our estimate, may remain at a similar level if the company maintains its payout ratio based on net profit. However, the free cash flow deficit and rising debt could force the company to cut dividends if the cash flow situation does not improve.

Shares trade at an EV/EBITDA multiple of 7.11, above the three-year average of 5.78, and the portal's model estimates a 7% downside

The current EV/EBITDA multiple is 7.11, notably above its own three-year average of 5.78. This means the market values the company higher than the average over the past three years, despite declining revenue and margins.

According to the portal's model, which re-prices EBITDA at current commodity prices and applies a target EV/EBITDA, the downside potential for the shares is -7% from the current market capitalization. This indicates that the shares are overvalued relative to the fair value based on our assumptions.

Valuation on the latest reported figures

Bottom line

In Q1 2026, Cemex reported declining revenue and EBITDA margin, as well as negative free cash flow, indicating operational and financial challenges. Net profit declined due to one-off factors, but operations remain profitable. Leverage is moderate but rising, and dividend yield is low. At the current valuation above its own history and the negative signal from the portal's model, the shares look rather unattractive. A change in the verdict would require a recovery in revenue and margin growth, as well as improved cash flow.