2017 weighs down on Holcim as profit plummets by 65%
The country’s leading cement maker Holcim Philippines posted a net profit of P2.4 billion last year, down by 65 percent from the previous year, attributed to the slowdown in the construction sector, increased competition and higher input costs.
Cement volumes stabilized in the fourth quarter, but weaker cement prices and higher production and distribution cost still gnawed on performance for the period, Holcim disclosed to the Philippine Stock Exchange on Friday.
Opportunities
Sapna Sood, president and chief executive of Holcim Philippines, said: “Despite a challenging 2017, we pursued initiatives and continued investments that [would] prepare us for the opportunities ahead in one of the best performing economies in the region.”
Sood said the company immediately went to work to mitigate the effects. “We launched projects to strengthen customer focus, improve the efficiency of plant and logistics operations, manage costs and offer more innovative building solutions. We expect these to improve our business performance and allow Holcim Philippines to have an even more positive impact on the country’s development.”
Although there was a steady increase in public spending in the second half, the sluggish growth of the construction industry led to a decline in cement demand. In addition, prices were weighed down by tighter competition amid the influx of imported cement. As such, Holcim’s revenues fell by 13.9 percent to P34.7 billion last year.
Lower revenues
With the lower revenues and higher production expenses primarily caused by increased fuel prices, consolidated operating cash flow as measured by earnings before taxes, interest, depreciation and amortization fell by 49.6 percent to P5.4 billion.
Sood said Holcim would continue initiatives supporting the massive infrastructure rollout in the Philippines.
In the third quarter of 2017, Holcim started a P3-billion project to raise its cement production capacity by two million metric tons in preparation for the projected rise in demand and as infrastructure spending picks up across the country.
Road infrastructure
Holcim Philippines also engaged stakeholders in the road infrastructure sector, showcasing innovative building solutions that enable them to deliver projects faster and more efficiently. Among the highlights of this program is the government’s accreditation of a “roller-compacted concrete,” a building technology that can speed up road infrastructure development.
Holcim Philippines has cement manufacturing facilities in La Union, Bulacan, Misamis Oriental and Davao. It also has aggregates and dry mix business and technical support facilities for building solutions. It is a member of the LafargeHolcim Group, the world leader in the building materials industry present in 80 countries. —DORIS DUMLAO-ABADILLA
