Cement firms report higher earnings on price hikes

By James A. Loyola

While sales remain muted, the country’s top two cement producers reported higher earnings on the back of an improvement in local market prices after tariffs were slapped on imports.

In a disclosure to the Philippine Stock Exchange, Holcim Philippines, Inc. said earnings before interest, taxes, depreciation and amortization almost doubled in the first nine months of the year to ₱1.2 billion on cost improvements across all its operations coupled with better prices of cement and aggregates.

Net income for the third quarter surged to ₱457.2 million from ₱176.9 million in the same period of the previous year.

The firm said “cement demand has started to pick up in the third quarter as government resumed its infrastructure spending.”

However, sales volumes were still lower than the third quarter of 2018 despite improved pricing resulting in lower net sales of ₱8.3 billion from ₱8.5 billion in the same period last year.

As of year-to-date September, Holcim Philippines sales have reached ₱23.7 billion from ₱27.3 billion last year.

Operating EBITDA rose 23.4 percent to ₱4.2 billion helped by the strong performance of aggregates, which grew by 38 percent on better prices despite lower volumes caused by the public construction slowdown. Net income grew by 8 percent to ₱1.9 billion.

“Our earnings improvement continues in the third quarter resulting in strong growth in the first nine months of the year despite lower sales revenues,” said Holcim Philippines President and CEO John Stull.

He noted that, “our intensified focus on cost and operational efficiency across all our operations has allowed us to sustain high performance levels amidst a still muted market environment. We have seen better pricing and a favorable product mix.”

Meanwhile, Cemex Holdings Philippines Inc. disclosed that its EBITDA jumped 42 percent to ₱3.4 billion in the first nine months of 2019 from ₱2.4 billion in the same period last year.