Cemex Holdings Philippines Inc. (CHP), recorded a net loss of P267 million for the first half of 2022 from a net income of P804 million in the same period last year, with a net loss of P528 million incurred during the second quarter.

In a disclosure to the Philippine Stock Exchange, the firm said the loss is mainly the result of foreign exchange losses, higher income tax expenses, and lower operating earnings.

Consolidated net sales for the first six months of 2022 amounted to P10.7 billion, a decrease of 2 percent compared to the same period last year. For the second quarter, net sales decreased by 5 percent year-over-year due to lower volume.

CHP’s domestic cement volume decreased by 8 percent for the first six months of 2022, and by 11 percent during the second quarter, compared to the same periods in 2021. The decline in volume was due to lower-than-expected demand.

The firm’s domestic cement price for the first six months of the year was up by 8 percent as price updates were made mainly to reflect input cost inflation in fuel and transport.

CHP’s cost of sales, as a percentage of net sales, increased by 2 percentage points year-on-year for the first six months of 2022 mainly due to higher fuel costs.

Fuel cost, as a percentage of cost of sales, increased by 12 percentage points year-over-year for the first six months driven by elevated energy prices.

Operating EBITDA for the first six months of 2022 amounted to P2.1 billion, 9 percent lower year- over-year. The decrease was mainly due to lower volume and higher cost of sales.

Foreign exchange losses, amounting to P713 million for the first half of the year, were attributable to movement in the Philippine Peso to U.S. Dollar exchange rate. A majority of CHP’s foreign exchange losses are unrealized (non-cash expenses).

Income tax expenses amounted to P560 million for the first six months of the year, derived mainly due to a decrease in deferred tax assets (non-cash expenses).

“We believe the Philippine economy will continue to recover in the months to come, despite current challenges,” said CHP President and CEO Luis Franco.

He noted that, “Like many, we are dealing with significant inflationary pressures to input costs such as energy and transport. We will remain focused on executing our strategies, managing the variables that we can control.” For full year 2022, CHP is now guiding a range of flat to low-single-digit percentage decrease for its domestic cement sales volume.

Challenging conditions are expected to persist for the rest of the year, amidst uncertainty tied to pandemic supply chain issues and the Ukraine War.