Holcim profit soars by 48%

Leading cement-maker Holcim Philippines grew its nine-month net profit by 47.8 percent year-on-year to P3.74 billion while results in the third quarter, usually a lean period, showed steady growth in sales volume and stable prices.

Net profit in the third quarter, alone, rose by 34.2 percent year-on-year to P691.2 million, which was attributed to continued revenue growth and the company’s cost management efforts and efficiency initiatives, Holcim said in a statement Wednesday.

Third quarter sales revenue grew by 7.4 percent year-on-year to P6.9 billion from year-ago level as demand and prices remained steady with both the private and public sector pushing ahead with projects.  This brought the nine-month revenue 9.5 percent higher year-on-year to P22.1 billion.

“The robust construction activities again pushed demand to outperform our expectation in the third quarter,” said Holcim chief executive officer Ed Sahagun, adding that the company had completed most of its maintenance activities.

Holcim’s plants went on their seasonal repairs in the third quarter, but the company said it made sure the markets were supported with supply.

The government reported that infrastructure and capital outlays grew by 38.5 percent to P169.6 billion.

Sahagun said the company’s plants in La Union and Misamis Oriental would have higher production capacities because projects to improve efficiencies were also implemented during the maintenance breaks.

“We’re proud to have completed our scheduled shutdowns safely. With these done, we are now focusing our attention to regular operations. These initiatives plus the start of our Mabini operations prepared us well for the expected upswing in demand. I expect us to finish the year strong so we can build momentum going into 2014,” he said.

Sahagun said the third quarter was a pleasant surprise for the cement industry as sales volume expanded by 9 percent, which he said suggested that the industry might surpass the 5-6 percent growth target for the whole year.

For Holcim, sales volume in the third quarter grew by only 4 percent but this was due to capacity constraint.

“We need another mill to bring it up and that’s where the Mabini plant comes in,” Sahagun said.