HOLCIM Philippines, Inc. announced on Thursday that its first-quarter attributable profit dropped by 54% to P420.28 million from P908.92 million previously, due in part to soft cement demand and higher production and distribution costs.
The company reported net sales of P6.7 billion for the first quarter of the year, which was 1% lower than the P6.8 billion reported in the same period in 2021.
“This is due to lower volumes sold despite improved prices, coupled with soft cement demand from private infrastructure projects and higher costs of production and distribution brought by increasing procurement prices especially on fuels and energy,” it said in its report.
Meanwhile, its first-quarter EBITDA, or earnings before interest, taxes, depreciation, and amortization, went down by 44% to P960 million from P1.7 billion in the same period in 2021.
The company noted that margins were affected by higher energy prices net of lower consumption of imported clinker and cement.
“Distribution costs were higher from last year due to higher outbound and interunit volumes to deliver direct to customers offset by lower transport costs/bag from procurement negotiations and logistics efficiencies,” it said.
“Production costs were higher mainly from higher production volumes, higher energy prices net of lower imported clinker consumption, lower imported cement and improvement on clinker factor,” it added.
At the same time, the company reported that it incurred higher financial expenses related to its short-term payables and lease liabilities due to loans obtained during the first quarter.
Both were needed to finance the company’s working capital requirement, it said.
The company added that its financial position has remained healthy with stable liquid cash position.
“The return on assets declined to 1.0% as of March 31, 2022 which is 1.2 percentage point lower from the end of 2021 as a result of lower net income. Total assets stood at P41.6 billion as of March 31, 2022, 3% higher from end of 2021.”
Holcim Philippines shares closed 4.14% lower at P5.10 apiece on Thursday. — Arjay L. Balinbin