HOLCIM Philippines, Inc. reported a 26.5% drop in its attributable profit for the first three months of 2018, as cement prices weakened amid “intense” competition.
In a regulatory filing, the listed cement manufacturer reported a net income attributable to equity holders of the parent of P691 million for the first quarter of 2018, lower than the P940 million it booked in the same period a year ago.
Net sales also declined by 2.3% to P8.6 billion during the quarter, as pricing pressures from imports dampened the 7% year-on-year increase in cement sales volumes.
“Demand conditions are improving as the government continues to ramp up infrastructure investments. However, its positive impact on our financial performance was not enough to offset higher energy costs and weaker cement prices brought by intense competition,” Holcim’s newly appointed President and Chief Executive Officer John Stull said in a statement.
The first quarter results is an improvement from the 61% profit drop Holcim recorded in full-year 2017 to P2.69 billion, where it also cited construction growth slowdown and tighter competition as the factors that dragged on its performance.
This year, Holcim said that it remains optimistic on the growth of the construction industry with the government’s rollout of more infrastructure projects under the “Build, Build, Build” program.
“Our company is well positioned to support this by providing reliable cement supply and rolling out innovative building solutions. At the same time, we will continue to improve and strengthen our cost management efforts centered on raising the efficiency of plant and logistics operations,” Mr. Stull said.
Holcim is currently expanding its cement capacity with the investment of $54 million until 2019. The capital infusion is expected to increase its capacity to 2 million metric tons.
Shares in Holcim added 47 centavos or 5.45% to close at P9.10 each at the Philippine Stock Exchange on Monday. — Arra B. Francia
