CEMEX Holdings Philippines, Inc. (CHP) suffered a net loss in 2018, pulled down by the impact of the landslide in Cebu and higher foreign exchange losses.
In a disclosure to the stock exchange on Friday, the listed cement manufacturer reported a consolidated net loss of P930 million, versus a net income of P659 million in the same period a year ago.
The company incurred a net loss of P325 million during the fourth quarter, since the firm where CHP mainly obtained its raw materials was affected by the landslide in Naga City, Cebu on Sept. 20.
It then had to source its materials from farther sources, pushing costs higher. The cost of sales accounted for 66% of the company’s sales, against 58% in the same period a year ago.
“The past quarter was a very challenging one following the landslide in Naga City. It tested the strength and resolve of all who were affected. The perseverance of the community was very inspiring even as we worked on restoring our operations to normality,” CHP President and Chief Executive Officer Ignacio Mijares said in a statement.
The company also added that higher income tax expenses recorded in the second quarter, lower operating EBITDA, and higher foreign exchange losses affected its performance for the year.
Despite the net loss, the company managed to increase its net sales by seven percent year-on-year to P23.42 million.
The private sector drove CHP’s business for the year, as residential construction remained strong, supported by the demand from overseas Filipino workers, foreign investors, and outsourcing and offshoring companies.
Meanwhile, infrastructure construction also expanded in 2018 following the 50% increase in the government’s disbursements for infrastructure and capital outlay in the first eleven months of 2018. During this period, the National Economic and Development Authority noted that nine flagship projects have broken ground.
The company remains upbeat for its prospects this year due to the expected robust demand for cement in the country.
“We are excited about the prospects for the company in 2019 and see continued strong cement demand in the country. For this reason, we remain focused on improving our operations and completing our expansion in a timely manner,” Mr. Mijares said.
CHP expects to finish construction of its new cement production line in Antipolo, Rizal by the fourth quarter of 2020. Its subsidiary, Solid Cement Corp., signed in October last year the procurement, construction, and installation agreement with China’s CBMI Construction Co., Ltd. for the facility.
Shares in CHP fell by 4.26% or 11 centavos to close at P2.47 each at the stock exchange on Friday. — Arra B. Francia