LEADING consumer and industrial solutions manufacturer Concepcion Industrial Corp. (CIC) sees both net profit and revenues rising by 15 percent this year on the back of the country’s increasing purchasing power.
On Monday, CIC reported that its net profit in the first three months had expanded by 50 percent year-on-year to P180 million, driven by a double-digit growth in sales of airconditioning systems and consumer durables.
“This year, we’re guiding the markets basically at 15 percent growth year over year for both topline and bottomline,” CIC chair and chief executive officer Raul Joseph Concepcion said in a recent interview.
The guidance of 15 percent growth for net profit suggests a full-year bottomline level of P758.4 million.
“It’a a very strong year. It’s very encouraging perspective and by the way this is beyond election,” Concepcion said, noting that CIC’s products were not those that usually receive a boost from any election season.
“We’re seeing fundamental change in the business and that fundamental change is basically a lot more spending power that’s driving our business,” Concepcion said.
For the first quarter, CIC reported that sales had expanded by 21 percent year-on-year to P2.7 billion. Carrier Airconditioning Co. (CCAC) grew sales by 18 percent and Concepcion Durables Inc (CDI) by 29 percent, respectively, in the first quarter compared to year-ago levels.
“We saw strong market growth in both consumer and building and industrial segments of our business. This mirrors the positive economic momentum of the industry driven by consumption and construction growth amidst healthy economic fundamentals,” Concepcion said.
CIC chief finance officer Ma. Victoria Betita added: “We continue to invest in capability building to prepare for the business growth we are anticipating over the long term. In addition to strong topline performance, favorable cost developments during the quarter including commodity prices and foreign exchange as well as our continued focus on improving our cost productivity has allowed us to post healthy profit growth.”
Last week, CIC entered into an alliance with electronics manufactuing house Ionics Inc. to develop a new generation of smart appliances and products using the Internet of things (IoT) technology.
Under IoT, while netizens are globally connected over the social network, any and all objects such as buildings, equipment, vehicles, home appliances, wearables and other devices will be connected over a spectrum of networks to communicate, control, manage, detect problems and derive insightful information.
For example, an IoT-enabled airconditioning system will be able to adjust its thermostat in response to the human body heat. This will allow the household or commercial enterprise to unlock savings from the use of energy, as consumption could go down by 40-60 percent. The airconditioning system can also automatically shut down when nobody is in the room. They will also have the ability to be controlled by mobile phones to provide real-time energy usage and to automatically react to changing environmental conditions in real-time.
“This is a foundation for us to provide better products,” Concepcion said, adding that Ionics would provide the hardware needed to develop such smart solutions.
Concepcion acknowledged that Internet speed remained a challenge, especially for consumers, but noted that in an industrial setting, such smart products would be easier to roll out.
Ionics chair Larry Qua said IoT would be a game-changer. “This collaboration brings together two reputable local companies that are both established in their respective industries, having deep understanding of the local market coupled with unparalleled global experience and expertise.”