Cemex Philippines has said it remains confident on the prospects for domestic construction activity on the back of government investment in infrastructure after seeing lower volumes and pricing in the first quarter of this year.
In the three months to the end of March 2017, Cemex Philippines consolidated net income declined by 24 per cent to PHP350m (US$7m), against pro forma net income from the same period of last year. Lower volumes and prices were partially mitigated by better cost of sales and lower financial expenses.
Cement volumes declined by nine per cent YoY in 1Q17 due to adverse weather conditions that persisted from last year into January and February, and a high comparison base which was marked by strong construction activity in the run-up to the 2016 elections. In the first quarter of this year, Cemex Philippines prices were down by seven per cent on a YoY basis.
Pedro Jose Palomino, president and CEO of Cemex Philippines, commented: "The first-quarter sales performance has been challenging, but we are encouraged by improvements in cement volumes versus the prior quarter, and a strong sales performance in March, which was the highest in the last 17 months. As a result, our revenue also increased by two per cent versus the prior quarter."
Mr Palomino added: "Despite the challenging demand situation, our company remains motivated by the prospects of Philippine construction, especially in light of the government's pronouncements on infrastructure investments. In the meantime, we remain focussed on managing variables under our control and our plans for growth in the country remain intact."
Refinancing
As of 31 March 2017, Cemex Philippines has refinanced and fully paid its US dollar-denominated related party loan with New Sunward Holding BV, with proceeds from a Senior Unsecured Peso Term Loan Facility with BDO Unibank Inc.
Vincent Paul Piedad, company treasurer, said: "This refinancing has slashed our financial expense and drastically reduced our foreign exchange exposure. Our consolidated financial expense decreased by PHP187m this quarter, versus the same period 2016 pro-forma."
