CEMEX Holdings Philippines, Inc. (CHP) expects profitability in three years as the cement company pushes for a financial turnaround.
“Our target is profitability in three years. There are a lot of things to do. There is room for improvement,” CHP President and Chief Executive Officer Herbert M. Consunji told reporters on the sidelines of an event in Taguig City last week.
“It cannot be immediate because we are coming from a net loss,” he added.
Mr. Consunji said that CHP, the country’s fourth-largest cement producer, is looking to implement operational efficiencies to boost its financials.
“At least to go above water. We have a lot to fix in the operations,” he said when asked about CHP’s target this year.
Mr. Consunji said that CHP hopes to reduce its losses this year amid recent cost-cutting initiatives.
“A lot will be removed, such as expenses, royalties, and so on. Although the interest costs are high again. We will try everything,” he said.
Following the announcement of CHP’s acquisition, DMCI Holdings, Inc. Chairman and President Isidro A. Consunji said in April last year that the cement manufacturer is expected to have a financial turnaround this year, led by stronger demand and the government’s infrastructure program.
On Nov. 29, CHP completed the sale of its shares in foreign reinsurance unit Falcon Re Ltd. to Torino Re Ltd. for $3 million.
CHP also previously sold its entire stake in Swiss-based Cemex Asia Research AG to Cemex Innovation Holding AG for $900,459.
On Dec. 2, Consunji-led companies DMCI Holdings, Inc., Semirara Mining and Power Corp. (SMPC), and Dacon Corp. finalized the purchase of Cemex Asian South East Corp. (CASEC), which owned 89.86% of CHP.
The deal was valued at $272 million and marked the Consunji group’s entry into the cement manufacturing business.
DMCI clinched a 51% effective stake in CHP, while Dacon Corp. and SMPC accounted for 29% and 10%, respectively, at the financial close of the transaction.
For the first nine months, CHP increased its net loss by 131% to P2.87 billion due to lower cement prices, higher financial expenses, and higher income tax expenses year-over-year.
Revenue declined by 9.4% to P12.21 billion due to intense industry competition and lower cement prices.
CHP shares fell by 1.12% or two centavos to P1.77 apiece on Monday. — Revin Mikhael D. Ochave
