MORE GOOD NEWS FOR EAGLE CEMENT | Marvin Germo
EAGLE CEMENT

MORE GOOD NEWS FOR EAGLE CEMENT

By: Marvin Germo | January 25, 2018

EAGLE will banking on greater infrastructure spending 2018

Eagle Cement has the largest integrated single plant production capacity in terms of cement output in the Philippines with its primary cement production facility located in Bulacan. The listed company is basically expecting a bullish or positive outlook this year with an expectation of higher bottom line figure due to its increased cement capacity.

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It is close to finishing its third cement plant in Bulacan which will increase its current capacity from 5.1 million metric tons to 7.1 million metric tons with its terminals for domestic transit of cement and export. The project was just approved last September 2017 by the Board of Investments (BOI) and such upgrade cost around US$138 million.

The said expansion is to cope up with the growing demand and increase infrastructure spending of the government. It is also expected that the company’s sales will increase by 35% this year and its market share at 25%.

4th Cement Plant in Cebu

Apart from its third plant in Bulacan, the company has started constructing its fourth cement facility in Malabuyoc, Cebu in order to cater the demands in Visayas and Mindanao. Despite the positive outlook, the company is well-aware of the fact that there will be challenges along the way such as competition as well as operational, financial and economic risks. Given this, it has already prepared its business strategies and operating systems in order to combat possible problems along the way; this includes the possible effects of the TRAIN Law.

The company has appointed one new member of the Board of Directors, Margot Cater, who will serve as the lead independent director, Chair of the Nominating and Governance Committee and a member of the Audit Committee of Installed Building Products, an installer of building products, and a director of Freeman Company, a brand experience business. Hopefully, her experience and expertise will be of great use to the company especially that it’s aiming to open more cement facilities.

Eagle Cement expects a steady flow of income especially with the implementation of its new project. The earnings last year increased by 7% for the first nine months following an increase also in its revenue to P11.2 billion. This year, it aims to reach an income of P4.3 to P4.5 billion.

Technicals

The stock is now floating at the short term support at 15. This is after it failed to breakout from the resistance at 15.8. The stock is worth buying should it stay above and bounce at 15. This is, if you have the intention to do a quick trade and sell at 15.8. Failure to hold 15, may result in a downward push to 14.4. However should the stock breakout from 15.8, the next target price can be pegged at 16.6.

 

 

EAGLE CEMENT CHART

 

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