Eagle Cement profit up 30%
Newly-listed Eagle Cement Corp. has bucked the earnings downturn among cement makers in the first quarter as it saw its cement sales volume ending at a record high this year.
In a briefing on its first quarter results yesterday, Eagle president Paul Ang said it was possible for the company to hit a sales volume of four million tons this year. This suggests a 33-percent increase from three million tons last year.
Eagle’s net profit in the first three months rose by 30 percent year-on-year to P1.03 billion on the back of a 19-percent growth in net sales worth P3.77 billion.
“We continue to see volume growth despite the decline in the prices of cement. We remain optimistic with our business strategy. We continue to grow our portfolio by increasing integrated production capacity and expanding distribution channels not only [in] Luzon but [also in] Vis-Min (Visayas-Mindanao),” Eagle chief finance officer Monica Ang said.
Eagle will also explore new markets and remain competitive, she said. In the first quarter, she said Eagle’s sales volume had expanded at a double-digit pace. Net margin also improved to 27 percent in the first quarter from 25 percent a year ago.
“Cement industry players usually experience good season in the first half due to the (favorable summer) weather. We expect construction activities to slow down in the third and fourth quarter but that’s an expected cycle every year,” she said.
While there were continued price pressures, Eagle’s growing volume and capacity would allow the company to remain positive on its outlook in the coming quarters, she added.
Eagle reported that the decline in infrastructure spending in the first quarter—in contrast to last year’s accelerated spending prior to the May elections—did not affect its performance.
The company reported robust retail business and remains optimistic on the government’s pronouncement of increased infrastructure spending under its P8-trillion “build build build” plan.
While it continues to keep its stronghold in the market, Eagle is also completing its third integrated cement production line in Bulacan, which is expected to be operational by 2018. It will add two million tons to Eagle’s capacity. The company is also set to begin construction of its fourth integrated cement production line in Cebu and its supporting facilities in Visayas and Mindanao in a bid to penetrate the cement market in the region.
Eagle also welcomed the Board of Investment’s inclusion of cement projects in the new Investment Priorities Plan (IPP) for tax incentive purposes.
“It’s a strategic move to encourage cement firms to expand, especially with a looming 47 million metric ton demand by 2025,” Paul Ang said.
