Holcim profit down in Q1 as pandemic slowed construction
The country’s leading cement maker Holcim Philippines posted a 28.7-percent year-on-year drop in first quarter net profit to P501.54 million due to softer prices and lower selling volumes, particularly in March when cement operations and distribution were suspended in Luzon due the government’s lockdown order.
Three-month sales revenues fell by 10 percent year-on-year to P7.3 billion as volumes fell particularly toward the end of the quarter.
Holcim also lowered cement selling prices to increase sales during the lockdown period and to maintain an acceptable gap against competitor prices, Holcim disclosed to the Philippine Stock Exchange.
The Luzon-wide enhanced community quarantine imposed on March 16 to contain the spread of the new coronavirus disease (COVID-19) halted building activities and slowed down construction work across the country. Localized quarantine measures also hampered the movement of goods and people.
“Like the rest of the country, our company was significantly affected by the COVID-19 pandemic and the government’s efforts to address it. As a response, we took immediate steps to protect the health and safety of our people and partners and the viability of our business with actions focused on health, cost and cash management,” said John Stull, president and chief operating officer of Holcim Philippines.
“Our company will continue to strictly adhere to the guidance of health authorities on this matter. Once the government eases the quarantine measures, we are confident that our strong health and safety culture will enable us to protect our people’s well-being in our sites and safely resume operations to support our customers and restart building activity in the country,” he added.
The company closed sites and facilities in Luzon in compliance with the quarantine order last March 16. It also shut down its plant in Davao City due to a similar action by the local government on April 2.
Holcim’s cash flow as measured by earnings before interest, taxes, depreciation and amortization reached P1.2 billion in the first quarter, down from P1.69 billion in the same period last year.
The cement company said it continued to strictly control costs and spending as revenues remained low.
“Guided by best practices across the LafargeHolcim Group, Holcim Philippines is preparing plans that will enable it to operate safely once the quarantine is lifted. Initiatives are focused on social distancing, personal hygiene and health checks,” the company said in a press statement.
Holcim added it was ready to share such best practices to partners, industry groups and government agencies to help ensure everyone’s safety when building activity resumes.
As part of its corporate citizenship budget, Holcim provided medical supplies to hospitals treating COVID-19 patients, as well as food and hygiene products to communities hosting its facilities in La Union, Bulacan, Manila, Batangas, Iloilo, Misamis Oriental and Davao City.
About 1,500 families and government front-line workers have benefited from the first batch of relief operations completed by Holcim as of mid-April.