MANILA, Philippines—The country’s leading cement-maker Holcim Philippines grew its first quarter net profit year-on-year by 77 percent to P1.43 billion as the company improved operating efficiency amid an industry-wide slowdown in demand for cement early in the year.
Revenues grew by 8 percent to P7.16 billion from a year ago supported by healthy demand from Luzon, particularly the National Capital Region, the company said in a press statement.
Cement demand growth in the country slowed to 3.4 percent from a hefty 20 percent in the same period last year as the sector came from a very high base given record volumes registered last year, according to the Cement Manufacturers Association of the Philippines.
Holcim Philippines chief executive officer Ed Sahagun said the company’s sales were affected by the heavy rains in January and February in Mindanao. But he added that cement volumes have been gradually rising, pointing to the sustained pace of large construction projects.
“Our positive financial performance in the first quarter shows the continued demand growth felt by the industry, albeit at a slower pace, and the recovery of prices. Aside from this, the improved efficiency of our plants and the organization’s commitment to keep costs in check were also factors in our good performance,” Sahagun said.
The company’s three-month results were the result of improved financial performance on strong sales, sustained cost management efforts and increased production efficiency.
Holcim expects demand to pick up in the second quarter as the private and public sector ramp up construction to take advantage of the dry season.
Sahagun noted that the credit rating upgrades given by Fitch Ratings and Standard & Poor’s to the Philippines would further drive the construction sector, as the lower interest payments on government debt would free up funds for infrastructure.
The investment-grade rating is also expected to encourage more foreign direct investments in the Philippines thus helping spur construction and fuel cement demand even more, he added.
Sahagun said Holcim Philippines was on track to revive its grinding facility in Mabini, Batangas, by the third quarter, which will help in its efforts to ensure steady supply as demand rises.
“With construction ongoing all over the country, ensuring supply is critical. Our presence in Mabini will help us ensure that our products are readily accessible to our customers in that area,” he said.
Efforts to revive the grinding plant in Mabini, Batangas are on track, ensuring the accessibility of Holcim products in the growing south Luzon market.