Cement producer Holcim Philippines Inc. (HPI) has regained momentum in the first nine months of 2015 on the back of a surge in demand for cement in the third quarter.
HPI booked a P4.55 billion net income for January to September, 12.6 percent higher than the year-ago figure of P4.04 billion.
“Driven by robust demand, HPI posted total net sales of P28 billion, 12 percent higher than the P25 billion reported for the same period last year,” HPI reported to the Philippine Stock Exchange on Thursday. “This was brought about by the continuous strong public and private construction activities nationwide.”
In the past two quarters, HPI has been recording lower year-on-year net income figures.
The reasons mentioned were scheduled plant maintenance and importation of an expensive clinker that weighed down mainly the firm’s first quarter bottom line.
For the third quarter alone, the company saw its profits more than double to P1.52 billion from P721.96 million same time last year. At that time, revenues increased by 23 percent to P10 billion from P8.11 billion in the previous year.
Holcim President and Chief Executive Officer Eduardo Sahagun said cement demand traditionally perks up by the third and fourth quarter of the year.
The company, thus, expects to improve its volume production and eventually achieve its goal to raise production capacity to 10 million metric tons (MT) by the end of next year, from the current 8 million MT.
The additional capacity is seen coming from HPI’s Calaca plant in Batangas (1.2 million MT); Mabini plant, also in Batangas (300,000 MT); and Star Terminal in Manila (500,000 MT).
HPI hopes to attain this, with the help of newly acquired Lafarge assets in August, worth almost P3.10 billion.
The obtained assets are in line with the LafargeHolcim global merger, meant to build up additional capacity for HPI. The LafargeHolcim Group is a global cement producer with 115,000 employees in 90 countries.
As local arm, HPI produces and supplies cement and aggregates (crushed stone, gravel and sand) nationwide, with factories in La Union, Bulacan, Misamis Oriental, and Davao.
It has pegged its 2015 capital expenditure (capex at P2 billion—P700 million for expansion budget and P1.3 billion for yearly operations expenses.