Crown Asia Chemicals Corp., a newly-listed chemicals and pipes firm, has reported 96.6 percent increase in its first quarter net income to P17.2 million from P8.7 million for the same period last year because of strong demand in construction industry for plastic products.
Walter H. Villanueva, Crown Asia Chairman and head of the Pipe Group, said in a statement that consolidated revenues also increased by 12.4 percent to P236.9 million from P210.7 million.
“With the PPR (polypropylene random copolymer) plant slated to begin commercial operations in the second half of the year, it is seen to further boost revenues and generate synergies,” Villanueva said.
“Crown is expected to continuously benefit from the robust construction industry as more aggressive marketing campaigns will be launched to advance market share and tap new segments,” he said.
The company manufactures chemicals for specialty plastic products as well as pipes for high-end real estate developments in Manila.
For the first three months of the year, the chemical compounds segment increased its sales by 9 percent to P148 million while revenues from the pipes business also increased by 18.7 percent to P88.9 million.
“Topline (revenue) growth was primarily driven by larger order volumes from customers in the private sector and supply agreements with certain government infrastructure projects for CROWN Pipes while exports of PVC [polyvinyl chloride]compounds increased by 67.9 percent,” the company said.
Cost of sales during the three month period was higher by 7 percent to P183 million from last year’s figures, while operating expenses also inched up 1.4 percent to P28.4 million from the cost containment efforts implemented across the business segments.
The company employs up to 45 percent of its production output to direct projects with major developers such as Ayala Land Inc., DMCI Holdings Inc., Federal Land Inc., Robinsons Land Corp., among others, while the rest goes to hardware and traditional trade channels.
For chemical compounds segment, about 40 percent of the output is exported to Taiwan and the United States, while the rest is for domestic distribution.
Villanueva said the firm expects to expand its reach to Visayas and Mindanao markets from its current concentration in Luzon and Metro Manila areas.
For this year, Crown Asia has set aside P175 million in capital expenditures (capex), which is higher than P63.4 million spending last year. The capex is mostly sourced from the fresh funds raised from its P222 million initial public offering (IPO), having P203.98-million net proceeds after listing related expenses and taxes.
Crown Asia is a plastics compound and pipes producer owned by the Villanueva and Perez families based in Guiguinto, Bulacan. It manufactures and sells plastic chemicals and compounds, as well as synthetic resins for making construction materials such as tubes and pipes.
The company is competing with Neltex, Moldex, Emerald and Atlanta in the pipes manufacturing space, while D&L Industries Inc. and Elastobest Manufacturing Corp. are some of its competitors in the specialty plastics, chemicals and compounds segment.
The company is the first to debut at the PSE this year, which is listed at the Main Board. The PSE expects nine to 10 market debuts for 2015.