Cement makers suffer weak quarter on falling sales
By Patricia Paola C. Marcelo
CEMENT manufacturers Holcim Philippines, Inc. and Cemex Holdings Philippines recorded drops in their net incomes for the third quarter this year on the back of shrinking sales, higher operating costs, and tighter industry competition.
In a statement, Holcim said its third quarter net income dropped to P337.2 million from P1.8 billion from last year, or an 81.27% decrease.
Holcim also “experienced cost pressures from rising energy expenses and the declining peso”, it said. Its operating EBITDA declined to P973.1 million from P2.8 billion during the same period last year.
“The company’s sales revenues from July to September slipped to P8.3 billion from P10.1 billion in the same period last year as the market challenges impacted volumes and prices,” Holcim said in a statement.
Following the third quarter results and “given the business conditions”, Holcim said it is “further strengthening its cost management efforts through logistics excellence, renegotiation of energy and procurement contracts to improve variable costs, and fixed cost management.”
For Cemex Holdings, consolidated net income for the third quarter declined to P201.91 million, from P983.2 million last year.This indicates a 79.47% decline.
Domestic cement volumes increased 2% year-on-year during the third quarter, based on positive demand buoyed by a pick-up in infrastructure spending and stability in private sector construction. However, domestic cement prices declined by 13% in the third quarter from the same period last year, which Cemex says reflect increasing competitive conditions.
Net sales for the third quarter was P5.57 million, down 11% compared to the third quarter last year.
Operating expenses as a percentage of net sales increased to 33.3% from 28.5%. Distribution expenses also increased, attributed to higher fuel costs and lower utilization of logistics assets.
Holcim Philippines, Inc. is a member of the LafargeHolcim Group, while Cemex Holdings Philippines is an indirect subsidiary of Mexican company CEMEX S.A.B. de C.V.
