Cement firm posts 8% profit growth

Cement-maker Eagle Cement Corp. saw an 8-percent year-on-year growth in nine-month net profit to P3.3 billion as the company expanded sales volume despite cutthroat competition.

Excluding one-off items, such as initial public offering expenses, Eagle’s core net profit rose by 10 percent while cash flow margins remained robust, the company told the Philippine Stock Exchange yesterday.

Earnings before interest, taxes, depreciation and amortization (Ebitda) and Ebit margins in the nine-month period remained high at 44 percent and 39 percent, respectively.

The cement maker grew net sales by 12 percent year-on-year to P11.24 billion, driven by a more than 20-percent expansion in sales volume of bagged and bulk cement, partially offset by the decline in the average selling price of cement versus last year’s average.

“The industry-wide concern on flooding of imports is continuing to put pressure on prices. Nevertheless, Eagle’s advantage of having a new and state-of-the-art plant and its prudent cost structure, help keep the profitability above expectation,” the company said.

“With its third production line in Bulacan to be commissioned in 2018, Eagle is best poised to withstand the imports threat,” it added.

Cost of goods sold for the nine months ending September went up by 19 percent, slower than the 23-percent rise in volume due to lower cost per bag. This was reflective of Eagle’s effective cost management efforts. As a result, gross profit rose by 5 percent to P5.37 billion in the first nine months of 2017 at a gross margin rate of 48 percent.