Holcim Philippines Inc (LafageHoclim group) said net income in the first three months of the year dropped 25 per cent due to higher energy costs and lower cement prices.

Holcim reported that net income for the period of PHP700m (US$13.49m), down from the PHP939.4m (US$18.1m) registered a year earlier. Margins were lower due to the higher cost of goods sold from higher input costs driven by fuel and power prices.

Net sales fell three per cent to PHP8.6bn although cement sales volume increased seven per cent due to increased construction activity. However, revenues were down 2.7 per cent due to the impact imports had on pricing.

"Our cement sales have increased but was offset by lower cement prices and aggressive market competition and as a result of operations winding down from recently announced closure of non-profitable ready-mix concrete and retail business segments,” Holcim said.

"Demand conditions are improving as the government continues to ramp up infrastructure investments. However, its positive impact on our financial performance was not enough to offset higher energy costs and weaker cement prices brought by intense competition," newly-appointed president and chief executive officer, John Stull, said.

"Nonetheless, we are optimistic about the construction industry’s prospects given the government's commitment to the 'Build. Build. Build' programme. Our company is well positioned to support this by providing reliable cement supply and rolling out innovative building solutions. At the same time, we will continue to improve and strengthen our cost management efforts centred on raising the efficiency of plant and logistics operations," he added.