Cemex returns to profit in Q2 on forex gains
CEMEX Holdings Philippines, Inc. swung back to profitablity in the second quarter, with foreign exchange gains helping offset lower volumes during the period.
In a regulatory filing, the listed cement manufacturer said consolidated net profit was P633.67 million in the three months to June, following a loss of P653.66 million a year earlier.
In the first half, net profit was P802 million, also turning aroun from the year-earlier loss of P585 million.
“Foreign exchange gains were realized due to the appreciation of the Philippine peso during the first six months of the year,” the company said, noting that the peso averaged P51.97 against the dollar during the period, after averaging P52.19 a year earlier.
Net sales meanwhile rose 2% to P6.12 billion in the second quarter, and rose 4% to P12.36 billion in the first half.
Cemex said domestic cement volumes fell 2% year-on-year, reflecting the construction slowdown due to the late passage of the national budget as well as restrictions on building activity prior to the midterm elections. The Easter and election holidays further affected volumes.
“We believe that this moderation in construction activity is temporary as solid macroeconomic fundamentals and the government’s drive to build infrastructure will support growth in the second half of the year,” Cemex President and Chief Executive Officer Ignacio Mijares said in a statement.
The company remains optimistic it will deliver better results for the rest of the year.
“As private and public construction activity are expected to pick up, I look forward to the second half of the year as we continue to focus on delivering on our commitments and providing value for all our stakeholders,” Mr. Mijares said.
Meanwhile, the company reiterated its intention to increase its authorized capital stock to P18.310 billion to allow them to raise equity capital. The company said this remains the best option to improve its capital structure, provide balance sheet flexibility, and fund the ongoing Solid Cement Plant expansion in Rizal.
Shareholders earlier rejected the plan, with analysts saying they feared dilution.
Cemex rose 2.19% or six centavos to close at P2.80 on Friday.