EARNINGS of Holcim Philippines, Inc. slumped by a fourth in the second quarter as higher costs and stiff competition dragged the double-digit increase in sales.
In a disclosure to the stock exchange on Thursday, the listed cement manufacturer said net income reached P868 million, 25% lower than the P1.16 billion profit it delivered in the same period a year ago. Operating EBITDA (earnings before interest, taxation, depreciation, and amortization) also dipped by 23% to P1.52 billion.
The decline came despite the 18.5% growth in revenues to P10.1 billion. This marked the first time the company reported an uptick in sales after three consecutive quarters of slower revenues.
“Our Q2 performance showed encouraging trends which translated into significant sales growth on the back of strong building activity,” Holcim President and Chief Executive Officer John Stull said in a statement.
“However, rising costs of fuel, power and distribution combined with the peso’s depreciation against the US dollar and tighter competition continued to impact our business performance in the second quarter,” he added.
On a six-month basis, Holcim’s net income dropped by 25% to P1.57 billion, with operating EBITDA also lower by 24% to P2.77 billion. In contrast, revenues rose 7.78% to P18.75 billion.
Amid the profit slowdown, the company will continue implementing projects to expand its capacity by two million metric tons, in order to reach 12 million metric tons by 2019. Holcim disclosed last year that it will be investing $54 million for this capacity upgrade.
Holcim’s cement manufacturing facilities are located in La Union, Bulacan, Misamis Oriental, and Davao.
Shares in Holcim went up 10 centavos or 1.37% to close at P7.40 each at the stock exchange on Thursday. — Arra B. Francia
