Arab investments weigh on EEI profit

LISTED construction company EEI Corp. reported netting P158.3 million last year, down 21 percent from the P200.3 million earned in 2022, amid the impact of losses sustained from an Arab joint venture.

Consolidated revenues, on the other hand, surged 28 percent to P18.8 billion from P14.7 billion generated a year earlier, the firm said in a recent regulatory filing.

EEI described 2023 as a “year of transformation,” completing 10 projects, winning 12 new developments, and continuing work on 30 projects in the Philippines.

“The transformation agenda ... aims to strengthen the four key pillars of EEI’s future: its governance, processes, financial health, and most importantly, its people,” it said. “EEI followed through with the execution of this agenda while continuing to work on its backlog of projects both domestically and overseas.”

The company said it delivered a net income of P1.5 billion from its local construction operations following various efforts to improve overall operating efficiency, reorient the commercial approach, and execute better project delivery.

The improvements in 2023 were bolstered by domestic construction activities, as revenues from EEI’s construction contracts climbed 30 percent to P16.3 billion.

The robust topline, however, was partly offset by a P1.3billion net loss incurred from a joint venture in Saudi Arabia with Al Rushaid Construction Co. Ltd. (ARCC).

“The recent year has been a challenging and redefining one for ARCC as the company continued its operational restructuring efforts,” it said.

“While leadership and structural changes were undertaken to address weaknesses in key processes … the issues surrounding legacy problematic projects, which were started prior to 2023, proved difficult to overcome,” EEI added.

This year, EEI plans to allocate a significant amount of its capital expenditures (capex) for infrastructure projects in anticipation of more construction orders.

The company in December formalized an agreement with China’s Zoomlion Heavy Industry Science and Technology and ZL Machinery Philippines Inc., a distributor of the Zoomlion brand of construction equipment.

“We have to be efficient with our capex budget. Acquiring equipment for several projects is one of the prudent investments we have to make to meet the demands of infrastructure work,” EEI President and Chief Executive Officer Henry Antonio said.

EEI’s share price improved by 2.94 percent to close at P5.25 last Friday amid a 0.47-percent downtick for the benchmark Philippine Stock Exchange index.