Holcim profit dipped by 10% in 1st quarter

MANILA, Philippines–Listed cement maker Holcim Philippines Inc. said profit growth slowed in the first quarter of 2015 as production costs increased while it highlighted increasing demand and the steps being undertaken to increase its capacity, its top official said in a briefing.

Holcim Philippines said its net income during the quarter dipped 10 percent to P1.5 billion from year-ago level. It said sales rose by 6.6 percent to P8.6 billion, although it was tempered by a 17-percent increase in its cost of sales, which hit P5.73 billion.

In a briefing, Holcim Philippines president and CEO Eduardo A. Sahagun said increased demand and a change in the timing of its plant shutdown required the company to use imported clinker, doubling the cost of this input.

Sahagun noted that the figures, nevertheless, indicated strong cement demand, driven by both private sector and government spending. The Department of Public Works and Highways earlier said it would ramp up infrastructure spending to 5 percent of gross domestic product, or $18 billion, by 2016 versus 1.9 percent of GDP four years ago.

Sahagun said steps were being taken to address manufacturing bottlenecks in its plants to “initially” bring up annual capacity to 10 million metric tons within the next two years. He said the current capacity stood at about 8.2 million metric tons.

“The market is growing faster than we anticipated,” Sahagun said. In line with this, the company is allotting about P2 billion for capital expenditures for 2015, he said.

In a separate statement, Holcim said it would continue to focus on operational efficiency to manage costs and keep supply stable, as the already robust construction picks up further during summer.–Miguel R. Camus