Delayed national budget sinks Holcim’s earnings in H1 2019

Anna Mogato

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Cement maker Holcim Philippines blames the delayed passage of the 2019 national budget for the slowdown in public infrastructure projects, which caused muted demand for cement

MANILA, Philippines – Holcim Philippines, Incorporated reported a lower net income for the 1st half of 2019 amid “muted public infrastructure projects” caused by the delayed passage of the national budget

In a regulatory filing on Wednesday, July 31, Holcim said its net income from January to June 2019 stood at P1.4 billion, a 12.5% drop from the P1.6 billion in net income generated in the same period in 2018.

In the 2nd quarter alone, the company generated P716 million, lower than the P868.9 million in the same quarter in 2018.

Net sales in the 1st half of 2019 stood at P15.4 billion, an 18.09% drop from P18.8 billion in the same period in 2018. Net sales during the 2nd quarter settled at P7.3 billion, lower than the P10.15 billion in the same quarter in 2018.

But the company noted a 22% year-on-year increase in net sales for its aggregates business, generating P1.1 billion due to better product mix and prices.

Holcim Philippines president and chief executive offier John Stull said they are expecting faster growth in the 2nd half of 2019.

“Holcim Philippines is ready to capture the market’s growth having put in place significant initiatives to drive performance and adequately respond to the country’s growing need for high quality building materials,” he added.

“This includes the completion of capacity expansion projects of our plants in North Luzon and Mindanao, where economic activity is among the most robust in the country.” (READ: San Miguel acquires 85.7% of Holcim Philippines for $2.15B)

Just last June, the company completed its Davao plant expansion project, which is seen to increase its production capacity to 2.4 million metric tons. Holcim upgraded its La Union plant back in January as well.

The company also launched its Solido brand last March, an alternative to its Ordinary Portland Cement. – Rappler.com

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