Cemex Holdings Philippines Inc. said its net income dropped by almost half in the first quarter of the year ending March to P89 million, from last year’s P168.6 million on lower sales.
The local unit of Mexican cement giant, Cemex SAB de CV, reported that net sales during the period fell 10 percent to P5.63 billion, from last year’s P6.23 billion, partly as a result of the lockdown in most key Philippine cities.
The Philippine government had placed Luzon under enhanced community quarantine (ECQ) in mid-March to prevent the spread of coronavirus disease 2019 (Covid-19).
The company said domestic cement volumes declined by 4 percent in the quarter from the previous year, while prices dropped 6 percent.
The company said it saw an 8-percent increase in volumes during the first two months of the year, but this was offset by the effects of the ECQ in Luzon and other quarantine measures around the country during the second half of March.
“These are extraordinary times we live in. Around the world, governments, industries and people are taking measures to deal with the effects of the Covid-19 pandemic, and Cemex is not an exception,” said Ignacio Mijares, company president and CEO.
“Our focus during these challenging times is on three priorities: first, to protect the health and safety of our employees and their families, customers, suppliers, and communities; second, to support our customers as much as possible in a responsible way; and third, to ensure the long-term business continuity of [the company],” Mijares added.
The company said it has P312 million in free cash flow after its maintenance capital expenditures. Capex for the first quarter reached P1.5 billion as a result of the Solid Cement plant expansion.
“The comparable cost base in the first quarter of 2019 was affected by the scheduled kiln maintenance of Solid Cement plant, higher sales from cement imports, and consumption of purchased clinker in cement production, as a result of the Naga landslide,” the company said.
As of end of March, the company’s total debt was at P13.48 billion, a decrease of some P6.6 billion from the fourth quarter, partly as a result of the stocks rights offer (SRO) it conducted earlier this year.
A portion of the proceeds raised from the SRO was used to pay respective debts owed by Solid Cement and APO Cement Corp. to Cemex Asia B.V.