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MANILA, Philippines - Holcim Philippines Inc. said it ended the first quarter with flat earnings despite higher sales and two rounds of price increases.
In a regulatory filing, the local unit of the multinational cement-maker said its net income slipped to P809 million in the January to March period from P819 million in the same period last year.
Total net sales grew 17 percent year-on-year to P6.6 billion, in line with the estimated growth of the industry, which benefitted from ramped-up government infrastructure spending and steady rollout of private construction projects.
"I think this year is going to be a good year. With a bit of luck, you'll see double-digit growth," Ronald van Wijnen, Holcim Philippines chief operating officer, said in a briefing.
He said sales volume may rise by eight to 10 percent this year as the company sees momentum from strong public spending boosting cement demand.
Rising prices of electricity and coal, which account for 60 percent of variable cost, remain a challenge, van Wijnen however said.
To recover the cost increases since last year, the cement maker has raised prices by five percent this year, bringing average selling prices to P200 per bag, still below the 2010 price level of P214 per bag. In 2011, prices fell to as low as P165 per bag.
"We will try another one [price hike] this month so that we can actually achieve the 2010 level," said Ed Sahagun, Holcim Philippines commercial director.
Anchored on the projected strong demand for cement, Holcim will reopen its idle grinding plant in Mabini, Batangas next year, which will partly reduce transport costs and increase the company's capacity by up to 22.5 million cement bags a year.
The cement manufacturer will spend P400 million to rehabilitate the facility, which was acquired in 2003 but operations of which was deferred because of low demand.
"Having facilities across the country –from North Luzon to Mindanao—gives Holcim Philippines the strong advantage of being near its markets, and our Mabini facility will help further strengthen capability and accessibility in bringing oyr products to where our customers are," van Wijnen said.
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