Based on financial statements submitted to the Securities and Exchange Commission (SEC), Chemphil (Chemical Industries of the Philippines Inc.) said it is pursuing new business activities as a long-term strategy but as a parent company, its immediate concern is to restructure the current liabilities to long term loans.
As of end-March 2001, Chemphil’s total liabilities reached P815.99, up by 11 percent from the P733.41-million level in end-2000. Its assets, meanwhile, amounted to P2.03 billion, a slight four percent climb from P1.9 billion in end-2000.
The company said while it was not aware of any other event that is expected to materially affect its financial condition other than the adverse forex rates and the increase in financial costs through higher interest rates, it expressed concern that the general slump in the present economic condition could mean a decline in the demand for its products.
"This could then mean a further decline in the demand for the industrial products of the group that serve these industries e.g. the detergent industry," Chemphil said.
In the first three months of 2001, Chemphil and its subsidiaries posted consolidated sales of P364.7 million, a 23-percent drop from last year due to the closure of the surfactants division of Chemphil Albright & Wilson Corp. (CAWC) following the sale of plant and equipment to Stephan Phils. in April last year.
Another subsidiary, LMG Chemicals Inc., experienced a substantial decrease in sales volume due to the worldwide shortage of raw materials for one of its major products, alkyl benzene. The company posted an operating income of P17.6 million in three months this year, down 17 percent from a year earlier.
As a result, LMG is presently downsizing its Pasig operations and putting more emphasis in its Pinamucan Tank farm.
On a consolidated basis, the Chemphil group’s net income slid to P3.07 million in the first quarter, from P24.4 million a year ago due to the abovementioned lost sales of high margin products.