CEMEX Holdings Philippines, Inc. swung to a profit in 2019 driven by higher operating earnings and a turnaround in foreign exchange gains.

In a report to the stock exchange yesterday, the listed cement manufacturer said its fourth quarter consolidated net income stood at P404.89 million, bringing its full-year profits at P1.28 billion, a reversal of the previous year’s loss of P970.69 million.

Net sales year-to-date was flat with a 1% uptick to P23.6 billion, but the bottomline was lifted by foreign exchange gains of P453.13 million from 2018’s foreign exchange losses of P381.44 million.

The slow down in net sales was attributed to a 3% decline in the fourth quarter to P5.37 billion, as unfavorable weather conditions in December affected domestic cement volumes to fall 3%. The whole-year performance was also dismal due to the slowdown in construction activity as brought by the delayed approval of the national budget and the elections in May.

Cost of sales during the year was 2% lower at P13.91 billion due to savings from using a new coal mix and lower electricity rates. Distribution expenses also fell 9% to P4.23 billion because of efforts to optimize the company’s supply chain.

“I am pleased with what we accomplished in 2019, as these were a result of our efforts to maintain efficiencies, optimize costs, and improve our customers’ experience,” Cemex President and Chief Executive Officer Ignacio Alejandro Mijares Elizondo said in a statement.

In 2020, Cemex is setting its capital expenditures (capex) at P7.4 billion, where P1 billion will be allocated for maintenance capex and P6.4 billion will be used for the expansion of its Solid Cement Plant in Rizal.

The company recently concluded its stock rights offering (SRO) where it raised P12.77 billion from selling 8.29 billion common shares. It is now securing regulatory approvals before its scheduled listing of the offer shares on March 4.

The P12.54 billion Cemex netted from the SRO will be primarily used for the expansion of the Solid Cement plant and the repayment of its subsidiaries’ outstanding debt with Cemex Asia B.V. The rest will be used to finance other corporate needs.

Cemex is the Philippine unit of Mexico-based Cemex S.A.B. de C.V. It handles the Island and Rizal cement brands in Luzon and the APO brand in Visayas and Mindanao.

Shares in Cemex at the stock exchange closed flat on Thursday at P1.41 apiece. — Denise A. Valdez