Cemex earnings slump 93% on construction halt

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EARNINGS of cement manufacturer Cemex Holdings Philippines, Inc. plunged 93% in the second quarter with the suspension of construction activity during the coronavirus-related lockdown.

In disclosures to the exchange on Tuesday, the listed firm said its consolidated net income at the end of June stood at P46 million, while net sales dropped 35% to P3.99 billion.

The company suspended the operations of its Solid Cement Plant in Antipolo from mid-March to May 19, leaving it reliant on its APO Cement Plant in Naga during the period.

Domestic cement volumes fell 31% while domestic cement prices slipped 6% during the three-month period.

For the year-to-date, Cemex’s earnings dropped 83% to P135.03 million as net sales contracted 22% to P9.62 billion.

Domestic cement volumes were lower by 17% while domestic cement prices were down 6%

The company directly attributes its performance decline to the slowdown in construction activity both from the private and public sectors. The coronavirus lockdown prohibited construction work for about two months, and infrastructure cash disbursements were 11.9% lower in April and May.

Additional factors are the dampened demand in the real estate industry due to economic uncertainties brought by the pandemic.

“The second quarter was very challenging for our company, with our volumes adversely impacted by quarantine measures nationwide. But we have seen construction activity gradually return with the easing of restrictions, starting the second half of May,” Cemex President and CEO Ignacio Alejandro Mijares Elizondo said in the statement.

Despite the challenges, the company still wants to expand its Solid Cement Plant in Antipolo, where the bulk of its P1.95-billion capital expenditures in the first half went. Cemex estimates a total investment of $235 million (about P11.57 billion) for the expansion project.

“We remain committed to supplying the Philippines with high-quality cement to build the country for many years to come. By acting safely always, working together as one team, and focusing on the tasks at hand, I am encouraged that we will be able to surmount the challenges that lie ahead,” Mr. Mijares said.

Shares in Cemex at the stock exchange closed flat on Tuesday at 90 centavos apiece. — Denise A. Valdez