CEMEX Holdings Philippines, Inc. (CHP) is looking at alternative means to cushion the impact of the suspension of operations for one of its subsidiaries’ raw material suppliers, following the landslides triggered by typhoon Ompong last week.
In a disclosure to the stock exchange on Monday, CHP said APO Land & Quarry Corp. (ALQC) is one of the companies affected by the cease and desist order issued by the mayor of Naga, Cebu which directed all parties to stop mining operations and activities, small scale quarries, sand and gravel extractions, and other related activities.
ALQC supplies raw materials to CHP’s unit, APO Cement Corp.
“CHP is now conducting an assessment on the effect of the cease and desist order on the raw materials sourced from Naga City and consequently, on the production output of APO Cement. CHP is also considering, at this time, alternative measures to address the situation,” the company said.
The listed firm earlier disclosed that a landslide happened occurred in Sitio Sindulan, Barangay Tina-an, Naga, Cebu on Sept. 20 following heavy rains that started in the previous day. It noted that ALQC has the mining rights for the affected area, and that the site is “neither an active nor an abandoned quarry area of ALQC.”
CHP added that it was coordinating with ALQC, which in turn had been working with government authorities for rescue and relief efforts in the community.
The company recorded a net loss of P635 million in the second quarter of 2018, versus a profit of P136 million posted in the same period a year ago, due to higher income tax expenses incurred for the period. This came amid a six percent growth in net sales to P5.99 billion for the period, as higher volumes offset the slowdown in prices.
The latest figures brought CHP’s six-month net loss to P535 million, compared to a net income of P486 million in the first half of 2017. Revenues meanwhile rose 8% to P11.88 billion.
The company said it would look for opportunities to improve profitability amid the rising input costs. It also noted that despite the losses for the first half, cash flows remain positive at P1.25 billion. This will enable the company to move forward with its expansion.
CHP is investing $225 million to expand its solid plant capacity, which it looks to complete by the first quarter of 2020. This forms part of the P3.74-billion capital expenditure CHP has set for this year, which also includes allocation for maintenance and other strategic investments.
Shares in CHP dropped 1.09% or three centavos to close at P2.71 each at the stock exchange on Monday. — Arra B. Francia
