Costs clobber cement firms’ Q3 results even as sales rise

LISTED cement manufacturers reported lower profits in the third quarter, weighed down by higher fuel prices, power and distribution costs and a weakening peso.
In a regulatory filing on Friday, Holcim Philippines, Inc. said its net profit during the three months to September fell 47.58% to P176.88 million.
Meanwhile, sales during the three-month period grew 3.15% to P8.52 billion versus the P8.26 billion clocked in the comparable period last year.
Earnings before interest, tax, depreciation and amortization was P634.57 million, down 34.79% from a year earlier.
In the nine months to September, net profit fell 24.35% to P1.74 billion while EBITDA totaled P3.4 billion, down 23.42%.
Sales in the nine months rose 6.27% to P27.27 billion.
“Our top line continued to grow positively in the third quarter thanks to our ongoing successful commercial initiatives. Results though were partly impacted by inclement weather tempering demand and pricing pressures. However, our financial performance continued to be affected by the steady rise in the costs of fuel, power and distribution as well as imported production inputs caused by the peso’s depreciation,” John W. Stull, President and CEO of Holcim Philippines, said in a statement on Friday.
“Amid these challenges, we remain focused on sustaining the improvements in plant productivity and lowering our costs to better support the strong construction activity nationwide and deliver profitable growth to our shareholders,” Mr. Stull added.
Holcim’s cement manufacturing facilities are located in La Union, Bulacan, Misamis Oriental, and Davao.
Meanwhile, Cemex Holdings Philippines, Inc. said it booked a net loss of P70 million during the third quarter, against a profit of P202 million a year earlier. EBITDA was P686 million in the third quarter, down 8% and P2.4 billion in the nine months to September, down 15%. It cited increased input costs and “shutdown-related expenses.”
Sales grew 8% to P6.03 billion during the third quarter and also rose 8% during the nine months to P17.9 billion.
In a separate disclosure, CHP President and CEO Ignacio A. Mijares noted that “higher input-cost inflation continues to be a challenge.”
“We are implementing several initiatives to improve our profitability and deliver value for our customers and shareholders,” he said.
Nevertheless, Cemex maintains that domestic cement demand “remains strong and reinforces our commitment to be a partner in the development of infrastructure in the country.”
“In line with this, we recently formalized the agreement with CBMI Construction Company of China for the construction of a new cement production line in our Solid Cement Plant in Antipolo, Rizal which will increase CHP’s cement production capacity by 1.5 million tons,” he said. — Janina C. Lim