Tighter competition and higher production expenses challenged the performance of building solutions provider Holcim Philippines, Inc. in the third quarter but the company continues to sustain its investment and expansion plans in the country, believing in the growth ahead.
“We remain steadfast in our support for Philippine growth and in the many opportunities in the market. We note the government’s recent report that infrastructure spending has started to pick up. To this end, the transformation of our company continues in order to better serve our customers and support the development of the country,” said Holcim Philippines President and CEO Sapna Sood.
From January to September, Holcim Philippines’s operating EBITDA reached Php 4.4 billion, with net income at Php2.3 billion.
Given the business conditions, the company is further strengthening its cost management efforts through logistics excellence, renegotiation of energy and procurement contracts to improve variable costs, and fixed cost management.
The company’s sales revenues from July to September slipped to Php 8.3 billion from Php 10.1 billion in the same period last year as the market challenges impacted volumes and prices. Given the sustained adverse business conditions, Holcim Philippines’s top line from January to September slipped to Php25.7 billion from Php31.0 billion in the same period in 2016.
Holcim Philippines also experienced cost pressures from rising energy expenses and the declining peso. As a result, the company’s third quarter operating EBITDA declined to Php 973.1 million from Php 2.8 billion year-on-year, while net income reached Php 337.2 million compared with Php 1.8 billion in the previous year.
Despite this, Holcim Philippines continues to ramp up its support for Mindanao with its Php 2.7 billion project expansion in Davao with groundbreaking of its facilities upgrading this October in rites to be attended by key government and top company officials. This will bring its cement production capacity in the city to 2.2 million metric tons, as part of raising Holcim Philippines’ total cement capacity by 2019 to 12 million metric tons from the current 10 million metric tons.
The company is also continually pursuing and co-developing solutions and technical services, together with its clients and partners that result in effective time and cost efficiencies, a key focus of the government’s infrastructure program.