HOLCIM Philippines Inc. on Thursday said its profits fell 25 percent during the first half of the year ending June, despite strong sales due to robust building activity in the country.
The company said its income for January to June fell to P1.56 billion, from last year’s P2.1 billion, as cost pressures and stiff competition continued to impact performance.
Net sales reached P18.75 billion for the period, up from last year’s P17.39 billion.
“Our second-quarter performance showed encouraging trends, which translated into significant sales growth on the back of strong building activity. However, rising costs of fuel, power and distribution combined with the peso’s depreciation against the US dollar and tighter competition continued to impact our business performance in the second quarter,” said John Stull, the company president and CEO. “Still, there are many opportunities for our business given the robust building activity throughout the country, and this is seen in our substantial sales growth in the second quarter. We remain focused on further improving operational efficiencies and rigorously managing our costs while expanding our business. This is essential to achieving profitable growth, allowing us to strengthen our ability to support the country’s development,” he said.
Income for the second quarter alone reached P868.9 million, still down by 25 percent from last year’s P1.16 billion.
Sales grew to P10.14 billion from last year’s P8.55 billion, or an increase of 18 percent.
The double-digit revenue growth in the second quarter is also an improvement from the three previous quarters of decline in sales, the company said.
The higher sales volumes of cement and aggregates resulted in first-half revenues of P18.8 billion, higher by 8 percent compared with P17.4 billion last year.
Improved productivity resulted in higher cement production across all plants, the company said.
Ongoing projects are expected to raise the company’s cement-production capacity to 12 million metric tons from the current 10 MMT, it said.