Friday, 22 May 2009

Holcim Philippines sales revenue surges 28% to P5.5B

As Philippine cement demand grows 6% in Q1

Honey Madrilejos-Reyes
Business Mirror

AS demand for cement grew 6 percent from January to March this year, sales revenues of leading cement manufacturer Holcim Philippines Inc. surged 27.907 percent to P5.5 billion in the first quarter from P4.3 billion in the same period in 2008.

With this sales’ performance, Ian Thackwray, Holcim chief operating officer, said the company’s net profit in the three-month period soared 71 percent to P793 million.

Holcim, meanwhile, said its board approved in a meeting before Thursday’s annual stockholders’ meeting held at Mandarin Oriental Hotel the distribution to stockholders of P0.20 per share.

In a filing, Holcim said it will distribute the dividend to all stockholders holding 6.452 billion shares as of June 5, 2009 not later than June 29, 2009. The amount, equivalent to P1.29 billion will be taken from P1.4-billion retained earnings as of December 31, 2008.

Thackwray demand for cement rose during the period because of the increased infrastructure projects and sustained commercial and residential construction activities.

“This certainly exceeds our expectations. We’re seeing higher than anticipated growth in the market, including regions outside the national capital region,” said Thackwray.

However, he said the first quarter financial results should not be regarded as indicative of what will happen this entire year.

“We are encouraged by the strong financial results, but there are several factors that will come to play, most important of which will be the ability to sustain infrastructure investment,” he said.

Even as input costs have begun to stabilize, Holcim continues to feel the effects of the steep price hikes of coal last year as it has yet to deplete coal stocks bought in 2008. The company was chose to buy coal locally, enabling it to protect itself it from further price increases and supply uncertainty.

In opting to continue tapping local coal suppliers, Thackwray said the company is negotiating with Seminar Mining Corp. for a potential long-term coal-supply agreement.

Meanwhile, he said the company is unlikely to increase its prices this year mainly because import cost in under control. “Also the competitive market would not allow us to do so.” Holcim has the control over one-third of the market.

Holcim, whose shares are traded on the Philippine Stock Exchange, has set a capital spending of P700 million for this year to fund the maintenance and improvement of facilities.

“While we are in a tough year, we still maintain higher-cape level,” said Thackwray.

As it focused on reducing coal and spare-parts inventories this year, Holcim has already succeeded in improving net-working capital and generated P1.5-billion free-cash flow from its operating activities, after capital investment.

A member of the Holcim Group, Holcim is engaged in the manufacture, sale and distribution of cement to local and export markets. It operates four cement plants located in La Union, Bulacan, Misamis Oriental and Davao.

In 2008, it produced 4.6 million tons of cement.

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