HOLCIM NET INCOME DOWN BY 17% IN Q2 | Marvin Germo

HOLCIM NET INCOME DOWN BY 17% IN Q2

By: Marvin Germo | August 2, 2019

17% Drop On Attributable Profit

Holcim Philippines, Inc. disclosed that during the second quarter of this year, the attributable net income went down by 17%. The firm reported that the net income attributable to equity holders was sustained at P716.15 million. This was lower than the P863.65 million the company generated last year in the same period. On the other hand, net sales jumped by 28% or equivalent to P7.28 billion. It seems like the growth during the second quarter of this year was slow for Holcim. It can be noted that last May, this cement company was acquired by San Miguel Corporation (SMC) and was predicted to affect the prices of the cement. So, let’s take a look at the important points regarding the performance of Holcim in this period.

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Reasons For Net Income Decrease

During the first half of this period, the attributable net income was down by only 9% to P1.42 billion. This was along with the 18% decline in net sales, equivalent to P15.38 billion. The generated sales were mainly due to the easing demand because of the restrained public infrastructure project. The delayed passage of the national budget has greatly affected the demand for infrastructure negatively. Also, since the previous news about Holcim talked about the prices of the cement, the company noted that the price management not only in cement but also in aggregates offerings impacted the lower volumes in this period. If the national budget had not been delayed, there could have been a big move in the firm’s financial report.

Improvements in Q2

Quarter 2 brought something good for Holcim. Although the attributable net income went down, the company’s EBITDA or the earnings before interest, taxation, depreciation, and amortization went up by 9.5% or equal to P3 billion during the first half of the period. This was caused by product mix, the efficiency of logistics, pricing, and cost-optimization. The margin grew by 5% as well. Delivering value to its customers and shareholders is included in the improvements this quarter because, without it, the performance couldn’t be as solid as it is now. And despite the infrastructure downtime, the firm still stands as one of the good companies in the cement industry.

Holcim’s Outlook

Holcim expects that the rest of the quarters this 2019 will bring more prosperity in the company. The firm told the public that it is ready to catch the growth of the market by exerting significant initiatives to drive its performance and of course, respond to the need of the target market for high-quality materials. Last June, the expanded Davao plant has been completed and it helped in raising the cement capacity to 2.4 million metric tons. This expansion plan began in October 2017 and estimated to reach P1.5 billion.

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