Holcim Philippines posts strong Q1 results
Key Messages
- Holcim Philippines posted improved financial performance on strong sales, sustained cost management efforts and increased production efficiency.
- The company expects demand to pick up in the second quarter as the private and public sector ramp up construction to take advantage of the dry season.
- Efforts to revive the grinding plant in Mabini, Batangas are on track, ensuring the accessibility of Holcim products in the growing south Luzon market
Cement demand growth slowed to 3.4% in the first quarter of 2013 as the sector was coming from a very high base with the record volumes registered last year, according to the Cement Manufacturers Association of the Philippines.
Despite the slowdown, leading cement maker Holcim Philippines, Inc. posted improved financial performance as the company sustained production efficiencies and cost management initiatives.
Holcim Philippines CEO Ed Sahagun said the company’s sales were affected by the heavy rains in January and February in Mindanao, but the demand in Luzon particularly the National Capital Region remained healthy. He added that company’s bulk cement volumes have also been gradually rising, which points to the sustained pace of large construction projects.
“Our positive financial performance in the first quarter shows the continued demand growth felt by the industry, albeit at a slower pace, and the recovery of prices. Aside from this, the improved efficiency of our plants and the organization’s commitment to keep costs in check were also factors in our good performance,” he said.
With these, revenues grew to Php7.16 billion while net income reached Php1.43 billion.
Sahagun expects cement demand to rise faster in the coming months as builders take advantage of the favorable weather for construction.
He sees demand to further improve once the Public-Private Partnership Projects begin to be implemented towards the latter part of the year.
Sahagun noted that the credit rating upgrades given by Fitch and Standard & Poor’s to the Philippines will further drive the construction sector, as the lower interest payments on government debt will free up funds for infrastructure.
The investment grade rating is also expected to encourage more foreign direct investments in the Philippines thus helping spur construction and fuel cement demand even more, he added.
Sahagun said Holcim Philippinesis on track to revive its grinding facility in Mabini, Batangas by the third quarter, which will help in its efforts to ensure steady supply as demand rises.
“With construction ongoing all over the country, ensuring supply is critical. Our presence in Mabini will help us ensure that our products are readily accessible to our customers in that area,” he said.
