Holcim profit drops 45% in Q2

MANILA, Philippines - Listed cement manufacturer Holcim Philippines reported a 45 percent decline in its second quarter income to P1.2 billion due to lower sales.

This brought net income in the first half to P2.1 billion, down 43 percent from the same period a year ago.

“Lower income was mainly due to lower sales as well as higher production input costs. The company has implemented various company-wide initiatives to further improve operational efficiency,” Holcim said.

It also noted a softer environment in the second quarter of the year compared to 2016 when volumes were significantly higher due to pre-election infrastructure spending.

Thus, second quarter revenues fell 20 percent to P8.6 billion.

From January to June 2017, the company registered P17.4 billion in revenues, 16 percent lower than the previous year on lower volumes and a dynamic price movement.

 Despite the decline in profit, Holcim remains bullish on its expansion plans.  It has set aside $54 million to boost its cement production capacity to 12 million metric tons from the current 10 million MT to support the strong demand arising from the government’s increased spending on infrastructure.

Holcim Philippines president and CEO Sapna Sood said the expansion reflects the company’s continued commitment to the development of the country and to serving its customers better.

“Our investments assure that Holcim Philippines will continue to provide a reliable supply of an essential building material as cement demand increases in the country as these projects come on stream,” she said.

The investment will be made in the next two years.  The expansion is expected to add two million metric tons by the first half of 2019 to its current cement capacity particularly in La Union and Davao.