CRH’s cement business in the Philippines has been hit as government infrastructure projects failed to progress as quickly as expected in 1H17, while pricing was put under pressure by cheaper imports.
CRH entered the Filipino market 2015 with the acquisition of assets from LafargeHolcim. It currently owns Republic Cement Group – a top-three cement producer – with Philippines-based industry conglomerate, Aboitiz Group.
“Volumes were 2% behind 2016 and operating profit and margin were also behind, due to lower selling prices in a very competitive market, and also higher fuel and power costs,” the company said in its interim results.
In April, CRH CEO, Albert Manifold, was forced to defend the company’s business in the Philippines, after it reported a 12% drop in year-on-year sales in the southeast Asian country.
Performance has not improved much since then, as the company reported an 11% fall in sales revenues in its 1H17 results, which also include CRH Asia’s divisional costs. Earnings were down 41%, while operating profits fell 62%.
Elsewhere in Asia, results were mixed. In India’s My Home Industries Ltd (MHIL) reported higher cement volumes and prices were more than offset by higher energy costs, resulting in lower operating profits in 1H16. In China, however, Yitai Building Materials reported higher volumes and prices compared to 2016, which were only partly offset by higher fuel and power costs.
CRH has a share of profit after tax from its stakes in both MHIL and Yitai.
Read the article online at: https://www.worldcement.com/asia-pacific-rim/04092017/crh-challenges-continue-in-philippines/