Cement manufacturer Cemex Holdings Philippines Inc. said Wednesday it recorded a net loss of P355 million in the first quarter amid the continued increase in input cost and lower sales.
First-quarter sales declined by 11 percent year-on-year to P4.6 billion as volumes dropped 16 percent on lower cement demand, CHP said in a stock exchange filing.
The company’s cost of sales, as a percentage of net sales, was at 79.7 percent in the first quarter of 2023, an increase of 17.7 percentage points year-on-year mainly due to higher fuel and power costs.
Fuel cost, as a percentage of net sales, increased 10.9 percentage points to 29.1 percent in the quarter, driven by steep inflation in global energy prices in 2022.
Power cost, as a percentage of net sales, was at 15.2 percent for the quarter, up by 3.2 percentage points year-on-year resulting from higher power rates due to renegotiations of electricity contracts in the second half of 2022.
CHP said to offset the sharp input cost inflation, it raised cement prices by 5 percent in the first quarter of 2023.
“As commented last February, we expect 2023 to be a year of transition for our company. Although we have already noticed an inflection point in costs such as fuel and electricity, our expectations remain that market conditions and cost inflation will continue to be challenging through the first half of 2023,” CHP president and chief executive Luis Franco said.
“With uncertain market conditions in the foreseeable future, we remain focused on finding efficient and sustainable ways of running our operations and improving results,” Franco said.
CHP is guiding for a low-single-digit percentage decrease for its domestic cement sales volume in 2023.
The cement firm shifted to a more cost-efficient fuel mix in February 2023, which resulted in significant increase in the rise of alternative fuels in both Solid Cement and APO Cement plants.