CEMENT manufacturer Cemex Holdings Philippines, Inc. (CHP) said on Tuesday its consolidated net income for the first quarter of 2017 dropped by 24 percent from the year earlier on lower cement volumes and prices.
Cemex said net income in the first three months fell to P350 million against the P460 million pro-forma net income recorded in the same period last year.
“Lower volume and price were partially mitigated by better cost of sales and lower financial expenses,” Cemex said in a disclosure to the Philippine Stock Exchange (PSE).
Cement volumes were lower by 9 percent in the first quarter of the year versus last year due to adverse weather conditions that persisted in January and February 2016 and a high base of comparison marked by strong construction activity prior to the last presidential elections, it said.
In the first quarter of the year, its prices declined by 7 percent year-on-year, it said.
“We are encouraged by improvements in cement volumes versus the prior quarter and a strong sales performance in March, which was the highest in the last 17 months. As a result, our revenues also increased by 2 percent versus the prior quarter,” CHP President and Chief Executive Officer Pedro Jose Palmino said.
Cost of sales fell 14 percent in absolute terms and 6 percent on a unitary basis against the same period in 2016 due to better energy costs.
At the end of the first quarter, CHP said it has refinanced and fully paid a US dollar-denominated related party loan with New Sunward Holding BV, with proceeds from a senior secured peso term loan facility with BDO Unibank, Inc.
“This refinancing has slashed our financial expense and drastically reduced our foreign exchange exposure. Our consolidated financial expense decreased by P187 million this quarter versus same period 2016 pro-forma,” CHP Treasurer Vincent Paul Piedad said.
CHP is one of the leading cement producers in the Philippines based on installed annual capacity. It produces and markets cement and other products, such as ready-mix concrete and clinker.
CHP is an indirect subsidiary of CEMEX, S.A.B. de C.V., one of the largest cement companies in the world based on annual installed cement production capacity. The shares of CEMEX, S.A.B. de C.V. are listed on the Mexican Stock Exchange and the New York Stock Exchange.