Consumer appliances and enterprise solutions firm Concepcion Industrial Corp. (CIC) reported that its consolidated net income fell 62 percent to ₱294.9 million in the first half of 2026 from ₱785.6 million in the same period last year.

Based on the firm’s financial report submitted to the Philippine Stock Exchange (PSE) last week, the drop in earnings came as the impact of the Iran war worsened in the second quarter compared to the first three months of 2026.

Earnings declined due to lower gross profit, higher operating expenses (opex), foreign exchange (forex) losses, higher interest expenses, and lower equity earnings from associate Concepcion Midea Inc. (CMI).

CMI’s equity contribution was likewise affected by higher provisions for impairment of receivables and forex movements.

CIC posted consolidated net sales of ₱9.9 billion for the first half of 2026, down two percent from the same period last year. On a combined basis, including its associate CMI, net sales increased six percent to ₱14.9 billion.

Performance during the first half of the year was affected by weaker retail demand, elevated energy and input costs, supply chain disruptions, and the continued depreciation of the Philippine peso, which placed pressure on gross margins and operating costs.

Lower retail demand reduced production volumes and resulted in factory under-absorption. These headwinds were partly offset by continued growth in commercial air-conditioning projects, aftermarket parts and service, as well as other appliance categories through the e-commerce channel.

The consumer segment posted ₱6.8 billion in net sales, down five percent year-on-year due to softer retail demand for air-conditioning and selected refrigeration products. This was partly cushioned by solid growth in other appliance categories through the e-commerce channel.

In contrast, the commercial segment posted net sales of ₱3.1 billion, representing seven-percent year-on-year growth, primarily driven by robust sales of commercial air-conditioning projects and aftermarket parts and service.

This was partly offset by lower elevator equipment sales due to the timing of equipment arrivals.

Year-to-date gross profit reached ₱3 billion, a seven-percent decline from the same period last year, while gross profit margin decreased to 30.2 percent from 31.9 percent a year ago.

The decline was primarily due to higher input costs and factory under-absorption resulting from lower production volumes, partly mitigated by selective pricing actions.

Total opex for the first half amounted to ₱2.5 billion, up five percent from the same period last year, mainly due to higher outbound distribution costs, increased provisions for impairment of receivables, and lower expense-accrual reversals compared to the same period last year.

Other operating loss amounted to ₱82 million, primarily due to forex losses arising from the depreciation of the Philippine peso, partly offset by interest income on deposits and other operating income.

Forex losses totaled ₱135 million, compared with a gain of ₱31.9 million in the same period last year.

Finance costs rose to ₱26.8 million from ₱11.4 million, mainly representing interest on lease liabilities and short-term borrowings.