Cemex Philippines profit soars in Q1

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EARNINGS of Cemex Holdings Philippines, Inc. (CPG) soared 137% in the first quarter of 2019 as sales improved despite flat annual volume.

In a presentation disclosed to the stock exchange Friday, the listed cement manufacturer said net income reached P172 million in the January to March period, compared to the P73 million it posted in the same period a year ago.

CHP attributed the jump in earnings to better operating income and lower foreign exchange losses.

Revenues meanwhile stood at P6.23 billion, six percent higher than the P5.89 billion it reported in the first quarter of 2018. Prices of cement rose by seven percent, offsetting the one percent decline in volumes during the period.

The company said volumes were still recovering after the landslide in Naga City, Cebu last year that affected its supplier of raw materials.

“At the start of the year, we set out goals for the company to grow our sales volume with the market and generate production and distribution efficiencies,” CHP President and Chief Executive Officer Ignacio Mijares was quoted as saying in a statement.

“There were challenges at the beginning as we were still recovering our markets that were affected by last year’s landslide in Naga City but I believe we managed to make significant progress along the way,” he added.

The landslide in Naga also resulted in a 14% increase in cost of goods sold, as it had to outsource clinker inventory and cement imports. The company was further affected by the maintenance shutdown of its Solid Cement plant in Antipolo, Rizal.

CHP has committed to spend P7.75 billion in capital expenditures this year, bulk of which will be used to expand its Solid Cement plant. The new line is scheduled to start operations by the fourth quarter of 2020.

“The strategic location of our Solid expansion project will allow us to efficiently contribute and take part the country’s infrastructure growth,” Mr. Mijares said.

To finance the facility’s expansion, CHP looks to raise $250 million from a potential rights offering. The capital raising activity is also expected to improve the company’s capital structure and provide flexibility to its balance sheet.

The rights offering will follow the company’s plan to increase its authorized capital stock to 18.3 billion shares from 5.2 billion shares at present.

Shares in CHP soared 5.26% or 10 centavos to close at P2 each at the stock exchange on Friday. — Arra B. Francia