Lockdown protocols pulled down Cemex income by 93% in Q2

Cement maker Cemex Holdings Philippines saw a 93-percent year-on-year decline in second-quarter net profit amounting to P46 million as construction activities ground to a halt due to the coronavirus-related lockdown protocols.Six-month net profit amounted to P135 million, down by 83 percent year-on-year as business activity was constrained by lockdown protocols.The earnings decline was mitigated by the increase in deferred tax assets related to net operating loss carryover and minimum corporate income tax credits. Without these, Cemex would have booked a second-quarter net loss of P70 million.Consolidated net sales for the first semester decreased by 22 percent year-on-year, reaching P9.6 billion. For the second quarter alone, sales tumbled by 35 percent year-over-year to about P4 billion.

“The second quarter was very challenging for our company, with our volumes adversely impacted by quarantine measures nationwide. But we have seen construction activity gradually return with the easing of restrictions, starting the second half of May,” Cemex president Ignacio Mijares said in a disclosure to the Philippine Stock Exchange on Tuesday.Domestic cement volumes decreased by 31 percent year-over-year during the second quarter. However, Cemex reported some volume recovery month-on-month in May and June.Alongside the slowdown in volumes amid soft demand, domestic cement prices slipped by 6 percent year-over-year during the second quarter and first half.The company’s Solid Cement plant in Antipolo, Rizal province, suspended production and delivery of cement products in the third week of March and resumed operations only on May 20, in compliance with government-imposed lockdown measures to curb the COVID-19 contagion.

On the other hand, its APO Cement Plant in Naga, Cebu province, remained operational.The ban on construction works imposed during the start of the enhanced community quarantine in Luzon starting mid-March and eventual decline in business activity gnawed on the company’s businesses.Cemex hopes the proposed Corporate Recovery and Tax Incentives for Enterprises Act will help businesses recover.—Doris Dumlao-Abadilla INQ