Holcim Philippines reports strong results in Q4 2018

28 February 2019
 

 

  • Q4 Sales up 3%, Q4 Operating EBITDA up 48%, Q4 Net Profit up 107%
  • Strong demand and steady prices were observed as construction activity remained robust in 2018
  • Effective cost management measures mitigated inflation pressures from production cost and higher financing charges to fund expansion
  • Expansion projects on track and set to benefit from the current booming of the building industry

John Stull, President and CEO of Holcim Philippines, Inc. said: “Our commercial initiatives were key to growing our business and allowed us to take full benefit from the robust construction sector which was one of the economy’s drivers last year and over the medium term. 

“In 2018, we faced higher production and financing expenses, but we successfully contained their impact on our financial performance through initiatives that emphasized operational excellence and cost prudence.

“2018 was an important year for Holcim Philippines in laying the groundwork to strengthen our company in a challenging business environment. We were able to deliver strong results in the fourth quarter and we believe we have created strong ground to perform in 2019. We are motivated to build on our successes in 2018 to better support national development and deliver strong returns to our shareholders.”

 

FINANCIAL PERFORMANCE

To manage rising production expenses and improve performance, Holcim Philippines continued to roll out cost prudence and productivity measures. The benefits of these initiatives were clearly felt in the fourth quarter, when the Company’s revenues grew by 3% to Php 8.4 billion while EBITDA surged by 48% to Php1.5 billion.

The strong fourth quarter enabled Holcim Philippines to reverse the declining trend in its performance and improve its overall 2018 results. The Company’s full year 2018 revenues reached Php 35.6 billion or 3% higher compared to 2017 on higher sales volumes driven by strong public and private construction.

The Company’s 2018 Operating EBITDA, meanwhile, reached Php 4.9 billion from Php 5.4 billion the previous year. Holcim Philippines booked a net income of Php 2.5 billion, a slight decrease from Php 2.7 billion in 2017, on higher interest expenses from short term loans to fund its expansion projects.

 

KEY DEVELOPMENTS

In January 2019, Holcim Philippines completed two months ahead of schedule the capacity expansion project of its La Union plant, increasing cement production there by 80% to 1.8 million metric tons. Furthermore, Holcim Philippines is set to invest US$ 300 million to upgrade its cement operations in Misamis Oriental and Bulacan as part of its continuing capacity expansion program. These projects will raise Holcim Philippines’s total cement production capacity to 13 million metric tons per year by end of 2020 to hold pace with the country’s increasing demand and will significantly improve the Company’s cost profile by substituting expensive imports.  

 

KEY FIGURES (IN THOUSANDS)

 

Fourth Quarter

Full Year

 

Oct-Dec 2018

Oct-Dec 2017

Jan-Dec 2018

Jan-Dec 2017

Net Sales

Php 8,355,326

Php 8,123,756

Php 35,623,113

Php 34,740,761

Operating EBITDA

Php 1,492,143

Php 1,011,108

Php 4,894,787

Php 5,447,375

Net Profit

Php 804,585

Php 389,310

Php 2,545,393

Php 2,689,798

For more information on our financial performance this quarter, you may check our page at the Philippines Stock Exchange website or the section on disclosures on our Company’s website.