Relaxed curbs pave way for cement industry’s comeback
The country’s leading cement-makers delivered a strong year-on-year growth in net profit at end-September as demand improved with the easing of pandemic restrictions compared to the hard lockdowns last year.
Eagle Cement chalked up P5.1 billion in nine-month net profit, up by 89 percent year-on-year, on the back of a double-digit volume growth. It has already attained 94 percent of earnings that market consensus expects it to deliver for the full year, even posting the highest profit and margin relative to peers.
Holcim Philippines recorded a 124-percent year-on-year growth in nine-month net profit to P2.3 billion, accounting for 63 percent of full-year consensus forecasts.
Cemex Holdings posted a net income of P897 million, up by 18 percent year-on-year, as higher cement volumes boosted operating earnings, while financial expenses declined.
The Aboitiz group also earlier reported that income contribution of Republic Cement & Building Materials for the period amounted to P1.4 billion, 247-percent better year-on-year. This was primarily due to stronger market demand from the residential and infrastructure segments, alongside measures to improve efficiency and a one-time gain that reduced its deferred tax liabilities.
Despite challenges
Overall, all cement firms reported higher net sales for the nine-month period, despite a more challenging environment in the third quarter when tight quarantine protocols were reimposed at some point, weather was unfavorable at times and input cost pressures escalated.
Holcim’s net sales increased by 7 percent year-on-year to P20.1 billion, attributed to improved demand for construction materials. In the third quarter, however, Holcim had to deal with significant fuel and power cost increases while market demand was affected by inclement weather and control measures against the resurgence of COVID-19. As such, third quarter net profit of P669.56 million was just flat from the year-ago level of P613.7 million.
Eagle generated nine-month net sales of P16.2 billion, 63-percent better year-on-year despite a decline in the average selling price of cement.
For the third quarter alone, it booked P5.2 billion in net sales, 28-percent higher year-on-year.
Third quarter net income inched up by 1 percent year-on-year to P1.4 billion.
“We are pleased to report encouraging set of results amid the pandemic, much lower cement prices and increasing input costs,” Eagle president and chief executive Paul Ang said.
Consolidated net sales of Cemex, meanwhile, increased by 8 percent year-on-year to P16.3 billion at end-September, although sales declined by 2 percent in the third quarter.
Cemex’s domestic cement volumes increased by 11 percent during the nine months in review, although the pace of growth slowed to 1 percent in the third quarter, amid the return of Metro Manila to stricter lockdown measures.
For the rest of the year, Cemex expects its performance to be affected by the La Niña phenomenon alongside inflationary pressures. INQ
