Cement maker Cemex Holdings Philippines Inc. suffered a 26% year-on-year decline in net profit in 2021 to 726 million pesos due to foreign exchange (FX) losses while its fourth quarter turned unprofitable due bad weather, including disruptions from typhoon “Odette”. ”
Cemex posted an attributable net profit of 726 million pesos last year, up from 985 million pesos a year earlier, the company announced on the Philippine Stock Exchange on Friday.
As the local currency depreciated against the US dollar, the company suffered 437 million pesos in foreign exchange losses in 2021, a reversal of 170 million pesos foreign exchange gains from the previous year.
As such, the company made less than half of the roughly 1.5 billion peso profits the market expected for 2021, based on the Bloomberg consensus.
For the fourth quarter alone, Cemex recorded a net loss of 172 million pesos against a net profit of 227 million pesos in the same period last year. While domestic cement volumes fell 2% year-on-year in the quarter, operating profit fell 82% to 52 million pesos.
Sales were flat year-over-year in the fourth quarter at around 4.6 billion pesos, mainly due to Odette disrupting operations at its Apo Cement unit.
Typhoon Odette, one of the costliest typhoons in Philippine history, hit the central and southern Philippines in mid-December and disrupted Cemex’s operations in Cebu.
“While Apo Cement suffered property damage due to Typhoon Odette, major plant equipment did not sustain damage. Apo’s plant was operational after the typhoon, but volumes were affected due to recovery efforts and infrastructure damage,” the company said.
For the full year, however, consolidated net sales increased 6% to 20.9 billion pesos, due to higher volumes in previous quarters. Despite the decline in the fourth quarter, domestic cement volumes increased 7% in 2021.
The company’s cement prices in the fourth quarter rose 3% year-on-year, but fell an average of 2% for the full year.
“Despite the challenges of COVID-19, adverse weather conditions and rising input costs, we are proud of our achievements in 2021. We have embraced health and safety, improved customer experience and made progress on our goals of sustainable development”, Ignacio Mijares, President and CEO of Cemex, mentioned.
In 2021, the company reported that its Apo Cement Plant and Solid Cement Plant recorded operational milestones related to higher production, lower clinker factors and increased use of alternative fuels.
The company now offers next-generation cement products described as “high quality” and “environmentally friendly” with a carbon footprint 15% to 40% lower than its traditional Portland cement.
For 2022, the company expects its cement volumes to continue to recover, with construction activity expected to remain a driver of the country’s economic growth. He noted that the 2022 national budget was the highest in the history of the Philippines, 11.5% higher than the 2021 national budget, with 17% allocated to the Department of Public Works and Highways and the Department of Transportation.
Cemex is an indirect subsidiary of the Mexican company Cemex SAB de CV, a global building materials company.
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