Cemex Q1 profit down sharply on higher costs

CEMEX Holdings Philippines Corp. said net income in the first quarter of the year dropped by 71.4 percent due to higher fuel and power costs and higher unrealized foreign exchange losses.

In a disclosure on Friday, Cemex reported a first quarter result of P100 million, down from the P350 million posted in the same period last year.

However, earnings before interest, tax, depreciation and amortization (EBITDA) were higher on the back of record quarterly domestic cement volume sales, which picked up by 16 percent from the same period last year.

Growth in volume sales resulted in a 10 percent hike in net sales to P5.9 billion from P5.4 billion last year.

Cost of sales increased at a faster pace of 24 percent, driven by higher fuel and power costs. This resulted in a first quarter EBITDA of P886 million, up by 41 percent from the fourth quarter of 2017 but down by 17 percent from the first quarter of last year.

“We are very focused on supplying the needs of the market, given the growing Philippine economy and what we believe will be a robust construction sector for many years to come. Our results showed our ability as a company to deliver on the country’s needs,” Cemex President and Chief Executive Officer Ignacio Mijares said.

“Strong local demand presents both opportunities and challenges for the industry. The execution of our expansion project and the attainment of greater operational efficiencies will be important for us to continue growing,” he added.

The company said it has embarked on de-bottlenecking activities this year to increase its annual throughput by half a million tons.

Cemex produces and markets cement and other products such as ready-mix concrete and clinker in the Philippines through direct sales using its extensive marine and land distribution network.