Cemex PH earnings hit by FX losses, ‘Odette’
Cement maker Cemex Holdings Philippines Inc. suffered a 26 percent year-on-year decline in 2021 net income to P726 million due to foreign exchange (FX) losses while its fourth quarter turned unprofitable due to inclement weather, including disruptions from Typhoon “Odette.”
Cemex recorded an attributable net profit of P726 million last year, declining from P985 million in the previous year, the company disclosed to the Philippine Stock Exchange on Friday.
As the local currency depreciated against the US dollar, the company incurred P437 million in foreign exchange losses in 2021, a reversal of the foreign exchange gains of P170 million in the previous year.
As such, the company delivered less than half of about P1.5 billion in profit that the market expected for 2021, based on Bloomberg consensus.
For the fourth quarter alone, Cemex booked a net loss of P172 million compared with a net income of P227 million in the same period last year. As domestic cement volumes declined by 2 percent year-on-year during the quarter, operating earnings fell by 82 percent to P52 million.
Sales were flat year-over-year in the fourth quarter, at about P4.6 billion, due primarily to Odette which disrupted the operations of its Apo Cement unit.
Typhoon Odette—one of the costliest typhoons in Philippine history—struck the central and southern part of the Philippines in mid-December and disrupted the operations of Cemex in Cebu.
“While Apo Cement experienced property damage due to Typhoon Odette, major plant equipment did not sustain damage. Apo plant was operational after the typhoon, but volumes were impacted due to recovery efforts and infrastructure damage,” the company reported.
For the full year, however, consolidated net sales inched up by 6 percent to P20.9 billion, due to higher volumes in previous quarters. Despite the fourth quarter dip, domestic cement volumes increased by 7 percent in 2021.
The company’s cement prices in the fourth quarter were 3 percent higher year-over-year but averaged 2 percent lower for the full year.
“Despite the challenges of COVID-19, adverse weather and rising input costs, we are proud of our accomplishments in 2021. We embraced health and safety, enhanced customer experience and advanced in our sustainability targets,” Ignacio Mijares, president and CEO of Cemex, said.
In 2021, the company reported that its Apo Cement Plant and Solid Cement Plant recorded operational milestones related to higher production, lower clinker factors and increased use of alternative fuels.
The company is now offering new generation cement products described to be “high quality” and “environment friendly” with 15 percent to 40 percent lower carbon footprint than its traditional Portland cement.
For 2022, the company expects its cement volumes to continue recovering, with construction activity to remain a driver of the country’s economic growth. It noted that the 2022 national budget was the highest in Philippine history, 11.5 percent higher than the 2021 national budget, with 17 percent allocated to the Department of Public Works and Highways and Department of Transportation.
Cemex is an indirect subsidiary of Mexico-based Cemex S.A.B. de C.V., a global construction materials company.
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