CEMENT manufacturers reported stronger earnings in the first three months of 2019, thanks to higher average selling prices of cement for the period.
In a regulatory filing, Eagle Cement Corp. (ECC) said its net income grew by 49% to P1.59 billion in the first quarter, after net sales also jumped 34% to P5.37 billion.
The listed firm led by businessman Ramon S. Ang attributed the increase to a double-digit uptick in sales volume alongside an improvement in the average selling price of cement. It added that the strong domestic demand was primarily driven by private consumption.
ECC saw cost of goods sold rise by 44% during the period, as it had to increase its consumption of coal as well as the use of imported clinker due to operational requirements. Operating expenses also went up by 27% to P522.7 million after freight costs jumped 31% and manpower costs also surged by 89%.
The company said it spent a total of P228.22 million in capital expenditures during the period, out of its full-year allocation of P3.28 billion. Its capital spending will support the expansion of its Bulacan facility by 1.5 million metric tons (MT) annually, resulting to an annual capacity of 8.6 million MT by 2020.
ECC is also developing its fourth production line in Cebu with a projected capacity of two million MT. The facility is scheduled to be completed in 2021.
Meanwhile, Cemex Holdings Philippines Corp. (CHP) recorded a consolidated net income of P169 million in the January to March period, 145% higher than the P69 million it booked in the same period a year ago. Net sales also improved by six percent to P6.24 billion.
CHP said the increase was “mainly due to lower foreign exchange losses and higher operating earnings.” The company also noted that domestic cement prices were up by seven percent due to price adjustments implemented last year.
The company saw strong demand from the residential segment, and is seen to continue with the development of more residential projects in Central Luzon and Calabarzon due to upcoming infrastructure projects in the area.
CHP is currently expanding Solid Cement, with investments of up to $235 million. The new facility is expected to come online in the first quarter of 2020. — Arra B. Francia