Philippines Republic cement 1Q net lifted by acquisitions

Philippines Republic cement 1Q net lifted by acquisitions
Published: 18 May 2004

Philippine producer Republic Cement Corp said it swung to a net profit in the first quarter after a substantial loss in the year-ago period on account of its recent acquisitions, an increase in cement prices, and the absence of cement imports.

Republic Cement said it made net profit of PHP235.7m in the first quarter, a reversal from a loss of PHP223.4m in the year-ago period.

Net sales for the quarter jumped to PHP2.34bn from PHP1.18bn in the year-ago period due to additional cement volume, provided by Lloyds Richfield Industrial Corp. and FR Cement Corp.

Republic Cement said sales volume rose 46% on year to 894,000t  from 611,000t. Without the contribution from Lloyds Richfield and FR Cement, it said sales volume would have only risen by five per cent on year.

It said the increase in sales volume was complemented by a higher average selling price of around PHP103 a bag compared to PHP95 a year ago.

“This (higher cement price) allowed the company to compensate for the increases in the variable cost, mainly purchase cost of fuel and electricity, freight and transport, as well as the peso depreciation," the company noted.

Republic Cement said while overall industry sales volume was down 2.8% on year to 3.36 million tons, the absence of any imported cement has allowed many cement companies to realize gains.

It said the imposition of a tariff on imported cement last year, as well as the depreciation of the peso, had made it unattractive to import cement.

The company said demand for cement was also affected by sluggish construction activity in the Philippines.