Eagle Cement net profit rose 13% in first half

Eagle Cement Corp. grew its first semester net profit by 13 percent year-on-year to P2.2 billion as sales volume expanded despite cutthroat competition that has curbed selling prices across the industry.

Net sales reached P7.5 billion, an increase of 12 percent year-on-year. Eagle attributed this to the increase in the sales volume of both bagged and bulk cement, partially offset by a decline in the average selling price of cement.

Gross profit margin remained high at 48.6 percent despite the decline in prices. Average cement prices across the industry were estimated to have contracted by 6-9 percent.

“We believe the market grew in the first half despite all the challenges,” Eagle president Paul Ang said in a press briefing yesterday.

Citing data gathered from Customs and pier offices across Luzon, Visayas and Mindanao, Ang estimated that the overall Philippine cement market had expanded by 5-6 percent compared to last year’s actual volume of 26 million tons.

In the first half, Ang said that Eagle’s cement volume had increased by a high-teen level while average selling price had gone down by a high single-digit level.

Demand for cement continued to come from the retail market, mostly for the construction of houses, Ang said. If and when infrastructure spending in the country accelerates, Ang said this would be a bonus for cement makers.

Eagle’s first-semester income from operations and cash flow reached P2.9 billion and P3.4 billion, an increase of 5 percent and 11 percent, respectively.

For the second quarter alone, Eagle’s net profit rose by only 1 percent year-on-year to P1.19 billion, coming from a high base in the comparative year-ago period and as the company rolled out a second line of production.

Excluding the impact of expenses from its recent initial public offering (IPO), its net profit increased by 6 percent year-on-year to P1.24 billion.