Mexico's Cemex SAB, the world's third-largest cement company, lost $707 million in the fourth quarter of 2008 — its first quarterly loss in a decade, the company said Thursday.

Full-year profits were down 92 percent to $203 million for 2008, compared to $2.4 billion in 2007, according to an earnings report released Thursday.

The Monterrey-based company blamed the drop on lower sales and losses on financial instruments.

"The year 2008 was one of extraordinary volatility in the financial markets and economic weakness that continues to spread throughout the global economy. And the fourth quarter was one of the most difficult quarters in recent history," said Hector Medina, Cemex's executive vice president of planning and finance.

The company reported a 23-percent drop in fourth-quarter sales to $4.5 billion. Earnings before interest, taxes, depreciation and amortization fell 27 percent in the fourth quarter to $808 million and 5 percent to $4.3 billion for the full year.

Fourth-quarter operating income declined 35 percent to $384 million compared to the same quarter of 2007, and full-year operating income decreased 16 percent to $2.5 billion.

Sales in Mexico were down 13 percent in the fourth quarter, and 32 percent in the U.S. market.

"In response to the challenging times we are facing, we remain focused on paying down debt and improving the efficiency of our operations in order to strengthen our financial structure," Medina said in a statement.

The quarterly loss and sales decline were roughly in line with estimates.

"This is a significant impact. It is not a positive result," said Carlos Hermosillo, an analyst with Mexico's Vector Casa de Bolsa.

"The net loss is the combination of various things, the operating weakness as well as bigger financial charges, exchange rate losses due to rate movements, the valuation of derivatives due to share price movements," Hermosillo noted.

The credit crunch and Mexico's sagging peso have also cost the company, which has struggled under a $16.3 billion debt burden since acquiring Australian cement maker Rinker Group Ltd. in 2007.

Cemex said this week it had refinanced $2.3 billion in debts due this year and next, extending the maturity until February 2011.