Acquisitions, maintenance activities cut Holcim profit
The country?s leading cement-maker Holcim Philippines saw a year-on-year decline in first semester net profit due to some nonrecurring items, the early implementation of plant maintenance activities, and higher usage of more expensive imported clinker.
Net profit in the first six months fell by 8.7 percent year-on-year to P3.03 billion while net profit in the second quarter slipped by 7.8 percent year-on-year to P1.52 billion, the company disclosed on Monday.
Some expenses associated with the acquisition of assets from LaFarge Republic Inc. (LRI) had likewise been booked in the first semester, but which can be reversed now that the acquisition had been completed, Holcim president Eduardo Sahagun said in a press briefing.
Holcim recently acquired from LRI the Lafarge Republic Aggregates Inc. (LRAI) and Star Terminal at the Harbor Center Manila for P2.647 billion and P410 million, respectively.
Holcim had also set aside provisions for an ongoing arbitration case in Singapore. The case involved a supplier whose contract was terminated after allegedly bribing a Holcim employee.
Sahagun said the arbitration case was costly, but it was something the company had to do to promote integrity.
Nonetheless, strong demand for cement managed to provide Holcim the leeway during the period in question, Sahagun said.
For the six-month period, Holcim chalked up P18 billion in revenues, higher by 6.7 percent than the previous year’s level. For the second quarter alone, net sales rose by 9.7 percent to P9.4 billion.
Sahagun said the company had embarked on new initiatives to meet the demand from customers.
By end-2016 to early 2017, Holcim expects to increase its capacity to supply cement by 2 million metric tons to 10 million tons.
