Cement manufacturer Cemex Holdings Philippines Inc. expects a “challenging” first half due to high consumer prices after incurring P1 billion in net loss in 2022.
“We anticipate that market conditions and cost inflation will remain challenging through the first half of the year,” Cemex president and CEO Luis Franco said in a disclosure on Tuesday.
As such, the listed company said it was projecting a flat to low single-digit percentage drop in domestic cement sales volume this year.
The cement firm noted that its full-year sales in 2022 had fallen by 2 percent to P20.6 billion as cement volume slipped by 10 percent on lower demand.
Operating cash flow as measured by earnings before income tax, depreciation and amortization, meanwhile, plunged by 26 percent to P2.8 billion last year on higher cost of sales and lower volume. Cemex noted that elevated inflation and weaker demand had adversely impacted its top line.
In addition, it booked foreign exchange losses of P934 million due to the peso’s drop in value against the dollar.
All these contributed to Cemex booking P1 billion in net loss last year, a reversal of P726 million in profits in 2021.
The company’s domestic cement price was up 9 percent last year as it hedged against input cost inflation, including fuel, electricity and transport.
Franco said, “2022 was a challenging year, as economic and political uncertainty translated to unprecedented cost increases, while industry demand softened. We expect 2023 to be a year of transition for our company.”
“Nevertheless, we expect to start to see the benefit of our efforts to reduce cost as the year progresses. I strongly believe that, by executing our strategies and working as one team, we will be able to build a stronger Cemex Holdings Philippines in 2023,” he added.
Last month, Cemex announced a P2-billion tender offer to purchase a portion of shares held by minority stockholders, which would reduce its public float to just above the minimum regulatory requirement of 10 percent from around 22 percent currently.