Cement manufacturer Holcim Philippines reported a 42 percent drop in net income to P2.06 billion last year from the P3.59 billion earned in 2019 as lockdowns and bad weather weighed down its performance.
In a disclosure to the Philippine Stock Exchange, Holcim saidnet sales declined by 22 percent to P26.06 billion from P33.49 billion as volume and prices dropped due to the impact of the pandemic.
“Lockdowns from March to May and severe weather conditions in the fourth quarter further affected the business. These hampered delivery of raw materials and services to production sites and dispatch of products to customers,” the firm said.
Holcim Philippines posted operating earnings before income tax (EBIT) of P2.8 billion which was 44 percent lower than the 2019 operating EBIT of P4.9 billion.
“Key to our resilient 2020 performance was our focus on Health, Cash and Cost. We improved efficiency and sustainability of operations,” Holcim Philippines President and CEO John Stull.
He added that, “We also introduced new building solutions and enhanced digital tools to better serve the customers. With our committed employees and loyal business partners, these improvements make us ready to help drive a faster recovery and deliver great value to all our stakeholders.”
The Company responded to the pandemic by rationalizing costs and managing expenditures. Programs addressing Health, Cash and Cost yielded a growth of 7 percent over 2019.
Distribution expenses decreased by 18 percent due to the operational and cost efficiencies, including the shift of delivery mode to higher proportion of pick-up sales. The Company also benefitted from the global decline in fuel and energy prices.
Holcim Philippines is expected to sustain its gains from cost management and efficiency improvements beyond 2020.
The firm said it kept operations free from COVID-19 in 2020 due to immediate actions in line with government guidelines and LafargeHolcim Group’s best practices. These enabled the Company to prevent any health-related disruptions and to provide reliable supply to customers after the lockdowns were eased nationwide.