EARNINGS of Concepcion Industrial Corp. (CIC) slipped in 2018 as the company was dragged down by a combination of higher expenses, volatile foreign exchange rates, and unfavorable weather conditions.
In a statement issued Monday, the listed maker of refrigerators and air-conditioners posted a net income of P1.4 billion, five percent lower year-on-year. This came amid a 2% uptick in consolidated sales to P14.2 billion.
The company attributed the lower performance to rising costs as a result of higher commodity prices, fluctuating foreign exchange rates, as well as the unfavorable weather, especially in the third quarter.
“Last year, we weathered short-term external challenges. However, things are looking more positive as the last quarter showed signs of a less volatile 2019,” CIC Chairman and Chief Executive Officer Raul Joseph A. Concepcion said in a statement.
Revenues for the fourth quarter rose by 11% to P3.9 billion, while profit after tax accordingly went up by seven percent to P383 million.
“We are confident that our core business will be back on a growth trajectory this year amidst more favorable market conditions,” Mr. Concepcion added.
The top executive said the company remains optimistic for its business this year, as it ramps up investments for its new technology unit, Cortex. Cortex was branded as CIC’s Internet of Things (IoT) device in November last year, alongside smart plug Buddee which marks the company’s entry into the home management system with residential air-conditioning as the starting point.
CIC said Buddee may be used with any brand of window air-conditioner and is available to be purchased through online marketplace lazada.com.
“We are excited to pursue strategic growth outside our core business as we aim to offer solutions that are innovative and relevant to Filipino families and businesses. Our key focus area for this year is expanding the product and services we will offer to our clients through our new technology subsidiary, Cortex,” Mr. Concepcion said.
The company earlier said that it looks to grow Cortex so that it would account for 20-25% of its revenues by 2020.
CIC also acquired last year Teko Solutions Asia, Inc., a tech platform that gives people real-time access to service and repairs for home appliances such as air conditioners, refrigerators, washing machines, and water heaters by connecting them to qualified entrepreneur technicians.
Incorporated in 1997, CIC is the company behind air-conditioners and refrigerators under the Carrier, Toshiba, Condura, and Kelvinator brands.
Shares in CIC plunged 5.75% or P2.50 to close at P41 each at the stock exchange on Monday. — Arra B. Francia