Construction boom lifts Holcim profit up to P1.65 B in Q2

MANILA, Philippines - As the bustling construction activity continued nationwide, cement maker Holcim Philippines Inc. posted a better-than-industry growth in sales and income in the second quarter.

In a regulatory filing, the company said net income in April to June inched up 1.85 percent to P1.65 billion while revenues climbed 8.5 percent to P8.81 billion from a year ago as sales further picked up from this year’s strong start.

“Construction gained momentum particularly in the Visayas due to the ongoing post-calamity reconstruction,” Holcim said.

“On top of the sustained government and private sector spending, we now see some major Public-Private Partnership projects being implemented in the metropolis, hence, our strong sales,” said Holcim Philippines CEO Eduardo Sahagun.

He said their sales volume growth was faster compared with the six percent for the entire local cement industry.

The recent data brought first-half sales to a record P16.86 billion and net income to P3.32 billion, up 10.3 percent and 8.7 percent, respectively.

Sahagun said in the coming months, the company’s focus will shift to completing the regular maintenance of its plants safely, on time, and within budgeted costs.

Completing the periodic maintenance activities is crucial to the company’s ability to support the market especially with the current pace of construction activity likely to be sustained in the medium term, the Holcim official said.

The listed firm allotted P1.2 billion for the replacement of parts of existing production plants. Last year, the company invested more than P2 billion to upgrade its production capacity.

“Long-term growth normally five to six percent. We will see eight percent for the short-term growth,” Sahagun said.

The company is still conducting the study for a merger with Lafarge Republic Inc. (LRI). Early this month, the Philippine units of global cement giants Holcim Ltd. and Lafarge SA started charting plans to consolidate their operations, reflecting a recent multi-billion merger that created the largest cement manufacturer in the world.

“We are still completing the study of the integration with LRI,” Sahagun said, adding that combined market share of Holcim Philippines and Lafarge is at 62 percent, which will be trimmed to around 48 percent.

The two cement plants of LRI in Norzagaray, Bulacan and the Iligan facility of subsidiary Lafarge Iligan Inc., together with their related assets, will be excluded from the consolidation program.

Holcim Philippines 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.