Concepcion Industrial Corp. (CIC), the listed manufacturer of refrigerators and airconditioning units Kelvinator and Condura, posted a 23 percent increase in net income last year to P628 million from P511 million in 2013 due to strong appliance demand in new commercial establishments and increase in mid-market buyers.
“Last year was a strong year across all of CIC businesses. Sales and profits of our core air conditioning and domestic refrigeration business expanded “ Raul Joseph A. Concepcion, CIC chairman and chief executive officer (CEO) said.
Net sales went up by 21 percent to P9.2 billion from P7.6 billion in 2013.
Concepcion noted more first-time buyers and keen interest on inverter technology for buyers replacing old units. He added that there is a continued increase in commercial projects. Concepcion also explained that the company’s profitability in the local domestic refrigeration business is improving due to cost reductions and that investments in high margin products are showing good returns.
CIC Chief Finance and Information Officer Victoria A. Betita said the business encountered few challenges in the second half of last year due to peso depreciation and rising logistics cost, but said it was offset by the company’s acquisition of Concepcion Otis Philippines Inc. in March last year.
“Our latest acquisition, Concepcion Otis Philippines Inc., was fully integrated starting second quarter of 2014, which also helped boost the company’s earnings for the year,” Betita said.
For this year, the CIC chairman and CEO said the firm will sustain the core business performance as they seek “growth in new markets and customer segments. We have earmarked key investments in company processes, people and our leadership as we head on to solid longer-term goals this year and beyond.”
Grace Velasco, CIC Investor Relations and Corporate Planning vice president, said in a text message that the company has programmed a three-year budget of P60 million to P80 million for maintenance capital expenditures (capex) in 2012 to 2014. The maintenance capex was for CIC’s investment in operations, processes and workforce.
Incorporated in 1997, CIC manufactures refrigerator appliances and airconditioning units and systems under brands Kelvinator, Carrier, Condura and Toshiba.