Refrigerators, appliances boost CIC earnings

MANILA, Philippines – Concepcion Industrial Corp. (CIC) reported a net income of P641.46 million in the nine-month period, up 15.6 percent from the previous year, fueled by the strong performance of its refrigeration and appliance businesses.

In a stock exchange disclosure on Monday, the consumer lifestyle and enterprise solutions provider reported consolidated net sales of P13.95 billion during the reference period.

READ: CIC profit up 15% to P355M in second quarter

The listed firm attributed its improved financial performance to the “stronger results” of its associate, Concepcion Midea Inc. (CMI), along with better performance of some of its subsidiaries.

Including contributions from CMI, total group net sales inched up by 11 percent to P19.6 billion.

Gross profit dropped 3 percent to P4.5 billion, primarily because of competitive pricing during the peak months, alongside higher input costs.

Factory under absorption, which means fixed overhead costs are not fully covered by production volume, was also cited.

Consumer segment

The consumer segment posted net sales of P9.7 billion, down 3 percent, mainly due to lower air conditioning category sales.

Commercial business delivered P4.2 billion in net sales, up 18 percent, due to the growth momentum of air conditioning equipment sales in commercial projects and strong sales performance in the contractor network.

CIC said additional contributions from its elevator equipment sales and aftermarket service revenues had bolstered its profitability.

“Our comprehensive product portfolio has allowed us to cater to diverse customer needs, resulting in consistent revenue growth throughout the year,” CIC chief finance and operating officer Rajan Komarasu said.

In the third quarter alone, consolidated net income declined by 25 percent to P107.2 million.

Weaker demand

This was even as consolidated net sales increased by 2 percent to P3.9 billion, driven by strong performance in refrigeration, laundry, other appliance and commercial businesses.

The third-quarter earnings were affected by weaker demand for residential air conditioners.

However, Komarasu said, “strong execution, coupled with our relentless focus on operational excellence, has positioned CIC for continued momentum.”

CIC’s portfolio includes air conditioning systems, refrigerators, laundry appliances, kitchen and small domestic appliances, as well as elevators and escalators.

It has strategically expanded to become a comprehensive provider of both consumer and commercial solutions, distributing a wide range of products and aftermarket services across international and Philippine brands, such as Carrier, Toshiba, Condura, Otis, Midea, Kelvinator, Shark and Ninja.