Eagle Cement Corporation (EAGLE) will continue with its P1.5 billion expansion-related capital expenditure program, confident that its strong balance sheet will give it the financial muscle to ride-out the adverse impact of the pandemic.
“Our strong financial position will allow us to weather this health crisis battering the economy without giving up major components of our expansion plans, which will secure our future growth,” said EAGLE President & CEO Paul Ang.
EAGLE ended the first quarter with total assets growing by 2 percent to P49.9 billion from P49.1 billion in end-2019 while total liabilities declined to P11.4 billion from P11.7 billion. Its stockholders’ equity rose by 3 percent to P38.5 billion.
The Company’s current gearing gives it flexibility to continue pursuing investment plans moving forward, with debt-to-equity ratio at 0.30 times and financial debt to equity ratio registering at 0.18 times. This is still well below EAGLE’s loan covenant requirements.
The decline in EAGLE’s net profit to P1.2 billion in the first quarter of 2020 from P1.6 billion in the year-earlier period reflected the impact of the pandemic which offset its robust performance at the start of the year.
Prior to the lockdown, the Company’s sales trend has showed that EAGLE would have outperformed last year’s first quarter results.
Ang said that, while spending for noncritical projects and activities will be trimmed in view of the economic slowdown, expansion-related capital expenditures will continue.
EAGLE has earmarked P1.5 billion capital expenditure for the construction of its fifth cement mill in its
manufacturing plant in San Ildefonso, Bulacan.
The new mill will add 1.5 million metric tons of cement output, pushing EAGLE’s annual cement capacity to 8.6 million metric tons by the end of the year.
Ang added there are good signs construction activity will rebound in the second half of 2020 as community quarantines imposed to control the spread of COVID-19 have eased.
“In line with the government’s call to prioritize critical infrastructure projects that will help restart the economy, we have ramped up our production since we resumed commercial operations last month. EAGLE is fully prepared to supply the steadily increasing demand for cement as more and more construction projects both in the public and private sectors open up,” said Ang.
Furthermore, to achieve its goal of becoming the country’s leading building supplier, EAGLE is taking steps towards digital transformation.
The firm has engaged an international provider of enterprise resource planning (ERP) system that is tailored fit for its cement manufacturing business. The new ERP system will enhance customer experience through an online customer portal, which provides features such as booking, tracking and arrival of orders.