Cemex Holdings Philippines Inc. (CHP) reported a consolidated net loss of P1.0 billion for 2022, 238 percent lower than its P725.5 million profit in 2021, mainly as a result of lower sales and foreign exchange losses.

In a disclosure to the Philippine Stock Exchange, the firm said its consolidated net sales for 2022 amounted to PHP 20.6 billion, a decrease of 2 percent compared to the prior year.

For the fourth quarter of 2022, net sales increased by 4 percent year-on-year due to higher price.

CHP President and CEO Luis Franco said “2022 was a challenging year, as economic and political uncertainty translated to unprecedented cost increases, while industry demand softened.” Domestic cement volume decreased year-on-year by 10 percent for the full year and 5 percent for the fourth quarter of 2022. The decline in volume was mainly due to lower cement demand.

The firm said its domestic cement price was up by 9 percent year-on-year for the full year and fourth quarter of 2022, reflecting the company’s pricing strategy to offset input cost inflation, such as in fuel, electricity, and transport.

CHP’s cost of sales, as a percentage of net sales, was at 67.2 percent for 2022, an increase of 5 percentage points year-over-year mainly due to higher fuel costs.

Fuel cost, as a percentage of net sales, was at 22.6 percent for 2022, an increase of 10 percentage points year-on-year driven by elevated energy prices.

Operating EBITDA for 2022 amounted to P2.8 billion, 26 percent lower year-on-year, mainly due to higher cost of sales and lower volume, resulting from the challenges of escalating inflation and subdued market demand.

Operating EBITDA margin for the full year declined by 4.7 percentage points year-on-year to 13.8 percent.

Foreign exchange losses, amounting to P934 million for the full 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).

“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,” said Franco.

He noted that, “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 2023, CHP is guiding for a flat to low-single-digit percentage decrease for its domestic cement sales volume.