Holcim Philippines has announced a substantial fall in earnings in 3Q17, as the challenging Filipino cement market hit volumes and pricing. Earnings were down by almost two thirds to PHP973 million from PHP2.8 billion the year before.
Year-to-date, the company reported earnings of PHP4.4 billion, a 45% fall on the same period in 2016 “mainly due to lower sales, as well as high costs of good sold”, the company said.
The costs of sales accounted for 80.1% of total net sales for 3Q17, compared to 67.1% in 3Q16. Year-to-date, cost of sales accounted for 76.3% of total net sales, compared to 67.3% in the first nine months of 2016.
The rise in costs has been driven by “cost pressures from rising energy expenses and the declining peso,” the company said. Compounding this has been a particularly challenging cement pricing environment, a result of softer-then-expected demand and aggressive market competition this year.
In response to the higher cost environment, Holcim Philippines has “implemented various improvement initiatives driving productivity and cost optimisation across its operations to mitigate the impact of higher costs,” the company said.
These include “logistics excellence, renegotiation of energy and procurement contracts to improve variable costs, and fixed cost management.”
A member of the LafargeHolcim Group, Holcim Philippines is a leading building materials companies in the southeast Asian country, operating four cement plants, as well as mobile ready-mixed concrete facilities and an aggregates business.
Read the article online at: https://www.worldcement.com/asia-pacific-rim/02112017/holcim-philippines-earnings-continue-to-slide-in-3q17/