Cemex Holdings Philippines Inc. (PSE: CHP) has reported a 7% year-on-year cement volume growth for 2018, driven by healthy demand from both the private and public sectors. The company had record volumes in the third quarter and first half of the year, as sales revenues reached PhP23.4 billion in 2018.
The company’s financial performance was adversely affected, however, during the fourth quarter following the landslide that happened in the City of Naga in Cebu on September 20, 2018. CHP obtained raw materials from farther sources which led to an increase in cost of sales, as a percentage of sales, to 66% in the last quarter from 58% during the same period in 2017.
As a result, the company’s operating EBITDA margin went down during the fourth quarter, to 7% from 12%, and for full year 2018, to 12% from 15%, against the respective periods in 2017. For the first nine months of 2018, operating EBITDA margin of CHP was at 14%, with the margin decline on a full year basis mainly due to the increase in cost of sales during the last quarter.
This lower operating EBITDA, together with higher financing and tax expenses, resulted in a net loss after tax of PhP325 million in the fourth quarter of 2018. For full year 2018, CHP recorded a net loss of PhP930 million.
“The past quarter was a very challenging one following the landslide in Naga City. It tested the strength and resolve of all who were affected. The perseverance of the community was very inspiring even as we worked on restoring our operations to normality,” said Ignacio Mijares, CHP president and CEO.
Despite the challenges in the fourth quarter, the company was able to achieve major operational highlights. CHP’s cement plants were ranked among the top performing cement plants in the entire CEMEX global system in terms of health and safety, efficiency, and product quality. CHP also achieved one of the highest client adoption rates among markets where CEMEX Go, our end-to-end integrated digital platform, has been introduced.