Cemex incurs ₧1-B net loss on forex woes, weak sales

Cemex Holdings Philippines Inc., a unit of mexican giant Cemex, said it incurred a net loss of P1.01 billion last year, a reversal of the P726-million net income it posted in 2021, mainly due to weak sales and foreign exchange losses.

For the fourth quarter alone, the company said its net loss widened to P172 million, from the previous year’s P195 million.

Foreign exchange losses reached P934 million for the full year, but the company said majority of its foreign exchange losses are unrealized.

Consolidated net sales for 2022 fell 2 percent to P20.57 billion, from last year’s P20.88 billion. For the fourth quarter, net sales rose 4 percent to P4.76 billion from the previous P4.57 billion, mainly due to higher prices.

“2022 was a challenging year, as economic and political uncertainty translated to unprecedented cost increases, while industry demand softened. We expect 2023 to be a year of transition for our company. We anticipate that market conditions and cost inflation will remain challenging through the first half of the year,” Luis Franco, the company’s president and CEO, said.

“Nevertheless, we expect to start to see the benefit of our efforts to reduce cost as the year progresses. I strongly believe that, by executing our strategies and working as one team, we will be able to build a stronger Cemex Holdings Philippines in 2023.”

For this year, the company said it growth of domestic cement sales volume may be flat or could even decline slightly.

The company said its domestic cement volume fell by 10 percent in 2022 and 5 percent in the fourth quarter alone. The decline in volume was mainly due to lower cement demand.

Cemex said its domestic cement price was up by 9 percent yearover-year for the full year and in the fourth quarter, reflecting the company’s pricing strategy to offset input cost inf lation, such as in fuel, electricity and transport.

Cost of sales, as a percentage of net sales, was at 67 percent for the year, an increase of 5 percentage points year-over-year mainly due to higher fuel costs. The company said its fuel cost, as a percentage of net sales, was at 22 percent, an increase of 10 percentage points from the previous year driven by elevated energy prices. The company said it will spend some P4.1 billion in capital expenditures this year, a huge chunk of which will be for the P3.8-billion new cement plant line for Solid Cement.