Holcim profit falls 47% to P2.03B

MANILA, Philippines - Cement manufacturer Holcim Philippines posted a net profit of P2.03 billion last year, down 47.1 percent from P3.84 billion in 2010, as weak demand and higher costs put a dent on its bottomline.

In a statement yesterday, Holcim said sales revenues slid nine percent to P21.62 billion due to a surge in prices of coal and electricity, which accounted for the biggest cost components in cement production.

“The environment in 2011 was certainly tough, but I believe we were able to demonstrate our resilience as an organization by responding early to market challenges and focusing on areas within our control.

We managed to keep our market share within our target range and put in place various initiatives that have helped us improve operational efficiencies and effectively manage our costs. All these help us to position ourselves well for future growth,” Holcim chief operating officer Roland Van Wijnen said.

He, however, noted the improved performance of the ready mix concrete and geocyle businesses without geocycle enjoying a banner year as Holcim stepped up the usage of alternative fuels and raw materials to reduce the company’s dependence on coal.

Holcim’s ready-mix concrete business, meanwhile, continued to gain the trust of its customers, especially premiere developers and contractors.

Van Wijnen said the company continues to adopt a cautiously optimistic stance anchored on the government’s commitment to frontload infrastructure spending and the continued vigorous construction activity from the private sector–both of which were already apparent in the last quarter of 2011.

He said Holcim would continue to explore ways to bring down costs through operational excellence and increased use of alternative fuels and raw materials.

“To ensure profitability levels that would enable us to make further significant investments to supply the market, cement prices will unavoidably have to be adjusted. For a sustainable operation, we need to return to 2010 price levels and recover the cost increases of 2011 and 2012,” Van Wijnen said.