Holcim Philippines reports 2017 performance
- Slowdown in the construction sector, increased competition and higher input costs impacted Holcim Philippines’s 2017 financial performance
- Volumes stabilized in Q4, but performance was affected by weaker cement prices and higher production and distribution cost
- Initiatives to improve operational efficiency and cost prudence and increase its building solution offerings to continue in 2018
- Investments in new capacities continue to prepare for expected increase in demand
Sapna Sood, President and CEO of Holcim Philippines said: “Despite a challenging 2017, we pursued initiatives and continued investments that prepare us for the opportunities ahead in one of the best-performing economies in the region.
“The construction growth slowdown, tighter competition and increased input costs affected our financial performance in 2017. But we reacted swiftly to mitigate these challenges. We launched projects to strengthen customer focus, improve the efficiency of plant and logistics operations, manage costs, and offer more innovative building solutions. We expect these to improve our business performance and allow Holcim Philippines to have an even more positive impact on the country’s development.
“Our company will continue these initiatives to further support the massive effort to improve the infrastructure in the Philippines. Our transformation allows us to enable our partners to execute these projects with high performance and efficiency, ultimately helping the country build better with certainty.”
FINANCIAL PERFORMANCE
Although there was a steady increase in public spending in the second half, the sluggish growth of the construction industry led to a decline in cement demand. In addition, prices were impacted as competition further tightened with the influx of imported cement causing revenues to decline year-on-year by 13.9% to Php 34.7 billion in 2017.
With the lower revenues and higher production expenses primarily caused by increased fuel prices, consolidated operating EBITDA fell by 49.6% from prior year to Php 5.4 billion. Net income reached Php 2.4 billion compared with Php 6.9 billion in 2016.
KEY DEVELOPMENTS
Holcim Philippines started a Php 3 billion project in the third quarter of 2017 to raise its cement production capacity by two million metric tons in preparation for the projected rise in demand as government ramps up infrastructure spending across the country.
Along with this, Holcim Philippines engaged stakeholders in the road infrastructure sector, showcasing innovative building solutions that enable them to deliver projects faster and more efficiently. Among the highlights of this program is the government’s accreditation of Roller Compacted Concrete, a building technology that can speed up road infrastructure development.
