Eagle Cement Corp. of business tycoon Ramon Ang said the company may double its net profit to P8 billion in the next six to seven years on increased production capacity to meet rising demand.
Eagle Cement president president John Paul Ang said in a recent interview a doubling of the company’s income was achievable, citing its capability to meet the increasing demand for cement.
“I am not looking at market share. But I have a target profit figure. Last year, we had P4 billion and I have been asked if I want to double it and when will I be able to achieve that. I said if you don’t do it in six or seven years, it means we did not do it in a trajectory that we want. But we will get to that (because) we have the capacity,” Ang said.
He expects cement demand in the Philippines to grow in the coming years.
“When I started in 2008, the Philippine cement market was at 15 million tons. Last year, Philippine market amounted to 26 million MT. That is 11 million in almost 10 years or a growth of over 1 million MT per year,” Ang said.
Ang said the company sustained its growth trajectory in 2017 after posting strong first-quarter earnings.
He said the company’s net income, revenues, Ebitda and volume all posted ‘high teens’ growth in the first three months of 2017 as the market expanded.
“Last quarter we grew high teens and this year first quarter we also grew high teens,” Ang said.
Eagle Cement is raising as much as P9.2 billion through an initial public offering scheduled this month.
The company plans to use proceeds from the fund raising activity to finance the construction of a new cement facility in Cebu.
Ang said the company planned to inaugurate the new P12..5-billion Cebu cement plant by the second half of the year, or right immediately after the IPO.
The cement plant will have a capacity of 2 million MT, boosting the company’s total production to 7.1 million MT.
Eagle Cement will sell up to 575 million common shares for a maximum price of P16 apiece.
Eagle Cement after the IPO will have public ownership of 11.5 percent and a market capitalization of P80 billion.
The company hired SB Capital Inc., PNB Capital and Investments Corp. and China Bank Capital Corp. as underwriters. It scheduled the offering from May 3 to May 10 and the listing date tentatively on May 17.
Eagle Cement earlier said it expected to sustain the growth momentum this year after reporting a net income of P4.11 billion in 2016, up 11.7 percent from P3.68 billion in 2015.
Net sales increased 20 percent to P13.27 billion in 2016, on the back of a 5.12-percent increase in sales price and 14.15-percent rise in sales volume with the completion of a second production line.