Cement maker Holcim Philippines Inc. said Thursday net income in the first quarter dropped 37.5 percent to P939.4 million from P1.5 billion in the same period last year, on lower public infrastructure spending, increased competition and higher production expenses.
Holcim Philippines said in a disclosure to the stock exchange sales declined 12 percent to P8.8 billion in January to March from P10.06 billion in the first quarter of 2015 from the combined effects of lower volume and price.
Margins were also depressed mainly by rising cost of production inputs from rising fuel prices and a weaker peso.
The company, citing internal estimates, said cement demand in the country contracted 2 percent year-on-year in the first quarter in the absence of pre-election spending this year.
The cement manufacturer, however, said it remained positive about the outlook for the rest of the year.
“Infrastructure and innovation are cited as pillars for the country’s 2017 productivity growth forecast at 6.4 percent GDP growth. These pillars are strengths of Holcim Philippines that we believe will buoy the company and make a big difference for customers. This region has been showing strong growth, giving us the optimism to continue to transform and serve our customers even better,” Holcim Philippines chief operating officer Sapna Sood said.
Holcim Philippines said it was implementing transformative initiatives to address current and anticipated challenges. These included initiatives to further improve customer services levels and the introduction of innovative construction solutions to help the country build better in response to the government’s infrastructure drive.
A member of the LafargeHolcim Group, Holcim Philippines operates cement manufacturing facilities in La Union, Bulacan, Misamis Oriental and Davao and mobile concrete ready-mix facilities.
The Duterte administration earlier announced plans to roll out more than P3.6 trillion worth of public infrastructure projects from 2018 to 2020, to usher in what it called the country’s “golden age of infrastructure.