Cemex income plunged in ’17

Cement-maker Cemex Holdings Philippines Inc. saw a 65-percent drop in net profit to P658.8 million last year as operating profit was weighed down by lower prices and higher fuel and distribution expenses while sales volume was flat amid stiff competition.

For the fourth quarter alone, Cemex incurred a net loss of P29.15 million, 306-percent higher than the net loss in the same period year-on-year, although domestic sales volume started to pick up during the period.

Excluding noncore items, COL Financial head of research April Lee-Tan said Cemex’s core net profit of P952 million for the full year reached only 84 percent of COL’s forecast and 87 percent of market consensus forecast. “Underperformance was due to higher-than-expected cost of sales,” she said.

Cement volume increased by 10 percent in the fourth quarter despite the challenging weather conditions, bringing the full-year average growth to 1 percent.

“Public infrastructure spending continued to increase in the last three months of the year, driving demand for our products, and compensated for a slowdown in private construction activity,” Cemex disclosed to the Philippine Stock Exchange on Friday.

Cemex reported that net sales for the fourth quarter reached P5.2 billion, 1 percent lower year-over-year.

Operating cash flow stood at P628 million compared to P1.4 billion in 2016 due to lower prices and higher fuel and distribution expenses.

Ignacio Mijares, Cemex president, said Cemex “remains positive on the prospects of Philippine construction, with expectations of sustained economic expansion in 2018.”

Full-year net sales reached P21.8 billion.

Domestic cement prices decreased by 9 percent year-on-year during the fourth quarter and by 10 percent during the full year. —DORIS DUMLAO-ABADILLA