MANILA -Cement maker Cemex Holdings Philippines Inc. recorded a P355-million loss in the first quarter of 2023 as its bottom line was squeezed by inflationary pressures and a slump in sales.
The loss came even as the company raised cement prices by 5 percent to blunt the sharp increase in fuel and power costs.
“[W]e expect 2023 to be a year of transition for our company. Although we have already noticed an inflection point in costs such as fuel and electricity, our expectations remain that market conditions and cost inflation will continue to be challenging through the first half of 2023,” Cemex Philippines CEO Luis Franco said in a statement on Wednesday.
“With uncertain market conditions in the foreseeable future, we remain focused on finding efficient and sustainable ways of running our operations and improving results,” he added.
For 2023, the company expects a “low single-digit” percentage decrease in sales volume.
During the first quarter, net sales fell 11 percent to P4.6 billion, the statement showed.
Cement volumes from January to March plunged 16 percent because of lower demand.
The company was weighed down by high fuel, electricity and transport costs during the period.
Costs, as a percentage of net sales, was at 79.7 percent during the quarter—up 17.7 percentage points from a year ago.
Fuel accounted for a larger share of net sales at 29.1 percent from 10.9 percent a year ago due to the steep increase in global energy prices.
Power costs also rose 3.2 percentage points to 15.2 percent “resulting from higher power rates due to renegotiations of electricity contracts in the second half of 2022.”
Thus, the company’s operating earnings before interest, taxes, depreciation, and amortization fell 90 percent to P102 million during the first quarter of the year.
Meanwhile, Cemex Philippines said it shifted to more cost-efficient fuel mix in its APO Cement plant last February.
“As a result, notable improvements have already been seen in [Cemex Philippines’] cost base,” the company said in the statement.
“In addition to its efforts with energy, [Cemex Philippines] has launched a program to achieve efficiencies in all areas of the company, not only production and supply chain operations, but also targeting potential savings from operating expenses and fixed costs,” it added.