Mixed results for Chile’s producers

Mixed results for Chile’s producers
Published: 18 May 2009

Chile’s three cement producers - Bío Bío, Polpaico and the local unit of Lafarge -  posted mixed results in the first three months of 2009 compared to the same year-ago period, according to separate reports filed with the country’s securities regulator SVS.

Cementos Bío Bío posted consolidated net profits of 415mn pesos (US$739,262), a 91.5% drop from the 4.87bn pesos reported for the same period in 2008.

Revenues decreased 1.9% to 85.4bn pesos, mainly due to a decrease in cement demand caused by the global financial crisis. Operating profit rose from 8.11bn pesos to 9.02bn pesos.

Due to the financial crisis, the company reduced its operating costs, but faced an increase in the interest rate of its debts.

The company has decided to put new development projects on hold, but continues to carry out those that were already underway, such as the construction of a US$26mn cement plant in region V’s San Antonio port.

Cementos Bío Bío is controlled by Chile’s Briones group. The firm has a 33.8% market share.

Cemento Polpaico saw consolidated net profits increase from 1.93bn pesos to 3.33bn pesos.

Revenues declined from 35.4bn pesos to 34.1bn pesos, while operating profits came in at 626mn pesos, 74.9% lower than 2.49bn pesos in the same period last year.

The results were mainly due to a decrease in sales, while operating profits were down due to an increase in sales costs.

Polpaico is 53% controlled by Swiss cement company Holcim.

Lafarge Chile’s consolidated operating profits were down 58.1% from 8.92bn pesos to 3.74bn pesos. Revenues decreased 24.2% to 43.6bn pesos.

Net profits were down 49.3% in the period to 3.24bn, compared to 6.40bn pesos in 2008.

The results were due to a steep decrease in sales and a 14% contraction suffered by the cement industry.

Also, the company’s historic 33.5% market share was reduced to 30.3% during Q1 due to a temporary price increase.