Cemex, Holcim incomes suffer from higher costs

The country’s top two cement producers continue to report increasing sales volumes in the first nine months of the year but these are not translating to higher profits and has even resulted in a loss.

In a disclosure to the Philippine Stock Exchange, Cemex Holdings Philippines, Inc. said cement sales volumes grew by 10 percent in the first nine months of the year while revenues increased 8 percent to 117.9 billion from 16.6 billion in the same period of 2017.

It posted a weaker 5 percent growth on volume for the third quarter of the year although net sales still grew 8 percent to 16.03 billion from 15.57 billion.

“Cement demand in the country remains strong and reinforces our commitment to be a partner in the development of infrastructure in the country,” CHP President and CEO Ignacio Mijares said.

For its part, Holcim Philippines, Inc. reported a 6 percent improvement in sales from January to September 2018 to 127.3 billion from the 125.7 billion posted in the same period last year.

Net sales for the third quarter of 2018 rose by a slower 3 percent to 18.5 billion from 18.2 billion in the same period last year.

“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,” said Holcim Philippines President John Stull.

However, despite higher sales, Cemex reported a net loss of 1605 million for the first three quarters of 2018, a reversal from the net income of 1688 million in the same period last year mainly due to higher input costs and shutdown-related expenses.

“Higher input-cost inflation continues to be a challenge for the Company. We are implementing several initiatives to improve our profitability and deliver value for our customers and shareholders,” Mijares added.

Holcim remained profitable in the first nine months of the year but net earnings dropped 26 percent to 11.7 billion from the 12.3 billion generated in the same period of 2017.

“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,” said Stull.

He added though that, “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.”