Holcim earnings climb 17% to P1.67B in Q1

MANILA, Philippines - The ongoing construction boom continued to bouy the income and revenues of cement maker Holcim Philippines Inc. in the first quarter.

In a disclosure, Holcim Philippines said its profits climbed 17 percent to P1.67 billion in the first quarter from P1.43 billion a year ago, “helped by the revenue growth along with increased operating efficiencies and effective cost management initiatives.”

Revenues jumped 12.3 percent to P8.05 billion from P7.17 billion year-on-year.

“Cement demand remained robust nationwide as the government ramped up infrastructure spending, while the private sector continued commercial and residential projects,” Holcim said.

Cement industry demand grew 8.6 percent in the first three months of the year on the back of strong public and private construction activities nationwide.

The construction phase of numerous Public-Private Partnership (PPP) projects will further boost demand in the medium term, bolstering Holcim ’s plan to put up a $550-million cement facility, a top company executive said.

“The strong cement demand is a positive indicator for the growing economy. It shows the government’s continued commitment to improving infrastructure and raising the country’s competitiveness,” said Holcim Philippines CEO Eduardo Sahagun.

It also showed the private sector’s bullishness on the available economic opportunities, Sahagun said.

Amid high demand, Holcim was able to keep the market supplied due to the good production of its plants and smooth logistics operations.

With infrastructure allocations raised more than a third to P404.3 billion, various private groups planning to continue project rollouts, and several PPP set for implementation, Sahagun said cement demand will likely grow over the medium term.

Holcim earlier announced its plan to invest $550 million for a cement factory in Bulacan. The facility, which will have an annual capacity of 2.5 million metric tons per year, was earlier expected to start operations in 2016.

“In the Philippines, we have a different situation. It’s an issue who will supply the volume,” Sahagun said.

Early this month, Holcim’s Switzerland-based parent firm signed a deal to merge with French rival Lafarge, a move that will create the largest cement supplier in the world.

Sahagun said the merger will take one and a half years to materialize in the Philippines.

For this year, Holcim Philippines allotted P1.3 billion mainly for the replacement of parts of existing production plants. Last years, the firm invested more than P2 billion to upgrade its production capacity.

Holcim produces four cement products: Holcim Excel, Holcim WallRight, Holcim Premium Bulk and Holcim 4X that are sold in bags, tonner bags and in bulk.

Its parent firm is one of the world’s leading suppliers of cement and aggregates (crushed stone, gravel and sand) as well as downstream activities such as ready-mix concrete and asphalt. The group holds majority and minority interests in more than 70 countries on all continents.