Concepcion Industrial saw slower net income growth in 2015

DESPITE POSTING record sales, Concepcion Industrial Corp. (CIC) registered a slowdown in net income growth last year in the absence of extraordinary gains that inflated profits in 2014.

The maker of consumer and industrial air-conditioners, as well as refrigerators, grew its net income attributable to the parent company by 3.5% to P661 million last year, slower than the 26% expansion to P637 million in 2014, Grace Velasco, company vice-president for investor relations and corporate planning, said in a mobile phone message.

“The 3.5% growth in earnings is coming from a high 2014 income base with positive one-timers in the early part of 2014,” CIC Chief Finance Officer Ma. Victoria A. Betita was quoted in a statement attached to a disclosure as saying.

Sales hit an all-time high in 2015, growing 15% to P10.6 billion from P9.2 billion a year ago, Ms. Velasco said.

In the fourth quarter, sales climbed at a faster pace of 25% with strong drop-through in earnings driven by the consumer durables and building solutions segments, alongside marked contribution of first-time buyers to the sales mix.

CIC sold over 750,000 units of consumer durables from air conditioning, refrigeration and new products in laundry and kitchen appliances — a milestone for the listed company.

“Our performance is an affirmation of rising income levels and strong private sector confidence in the economy. These indicate a bright outlook for 2016 and over the long-term,” CIC Chairman and Chief Executive Officer Raul Joseph A. Concepcion said.

Last year, CIC unveiled a six-year road map with the aim of increasing its net income fivefold to P5 billion and sales to P50 billion by focusing on its core business, expanding peripheral offerings and solutions, and exploring opportunities for synergistic acquisitions.

“We are confident about our accelerated growth plans for the next five years. 2015 was about taking action towards achieving longer- term goals. In addition to our constant focus on cost reduction and profitability, we have made significant strides in building organizational capability and processes,” Ms. Betita said.

CIC is the principal holding company for Concepcion-Carrier Air Conditioning Co. and Concepcion Durables, Inc. It controls the rights to the cooling and refrigeration brands Carrier, Condura, Kelvinator and Toshiba.

Shares in CIC dropped 7% to P37 apiece on Wednesday trading. —