CEMEX Holdings Philippines, Inc. (CHP) said it saw a wider net loss for the first quarter, amounting to P917.84 million compared with the P355.49 million net loss last year.
The company’s first-quarter revenues dropped by 15% to P3.94 billion from P4.65 billion in 2023 as a result of lower cement prices and strong market competition, CHP said in its quarterly report to the stock exchange disclosed on May 6.
“During the first quarter of 2024, the company’s operations remained negatively affected by challenging market conditions, mainly resulting from intense industry competition, heightened by the presence of imported cement,” CHP said.
“These conditions, together with soft cement demand which has prevailed over the last two years, have resulted in lower cement prices year over year, limiting the execution of the company’s pricing strategy to recover profitability,” it added.
CHP’s cost of sales dropped by 11% to P3.3 billion due to lower fuel and power costs. Operating expenses also fell by 5% to P1.3 billion as a result of supply chain efficiencies.
“The company continues to optimize production and supply chain operations, fixed costs, operating expenses, and working capital to counteract market challenges during the year,” CHP said.
“Through these efforts, the company continued to show resilience, with significant cost containment efforts in fuels and enhanced operating efficiencies,” it added.
Previously, DMCI Holdings, Semirara Mining and Power Corp. (SMPC), and Dacon Corp. bought CHP for $305.6 million under a share purchase agreement to expand the conglomerate’s portfolio. The transaction is scheduled to close before yearend.
DMCI bought the entire shares of Cemex Asia B.V. in Cemex Asian South East Corp. (CASEC), the majority owner of CHP with an 89.96% equity interest. DMCI will acquire a 56.75% stake in CASEC, Dacon will secure 32.12%, and SMPC will purchase the remaining 11.13%.
Dacon has been appointed as the bidder for the mandatory tender offer to acquire the remaining 10.14% of the total issued and outstanding capital stock of CHP.
On Thursday, CHP shares rose by 6.62% or nine centavos to P1.45 apiece. — Revin Mikhael D. Ochave
