Cemex Holdings Philippines Inc. (CHP) said it expects a flat growth to low-single-digit percent decline in domestic cement sales volume this year after it closed 2022 with a P1- billion loss, reversing 2021’s P725.53 million profit, attributed to foreign exchange losses.
The company said it recognized a P934 million forex loss last year as the peso depreciated relative to the dollar.
“Majority of CHP’s foreign exchange losses are unrealized (non-cash expenses),” the company told regulators.
Sales for the period dropped 2 percent to P20.6 billion from P20.89 billion the prior year a sales volume decreased 10 percent.
“The decline in volume was mainly due to lower cement demand,” it said.
The company said in the fourth quarter, sales grew 4 percent though volume dropped 5 percent as it raised prices.
“CHP’s domestic cement price was up by 9 percent year-over-year for the full year and fourth quarter of 2022, reflecting the company’s pricing strategy to offset input cost inflation, such as in fuel, electricity, and transport,” it said.
The company said it recorded higher direct cost due to the high price of oil, with CHP’s direct costs as a percentage of net sales growing 5 percentage points to 67.2 percent.
“CHP’s fuel cost, as a percentage of net sales, was at 22.6 percent for 2022, an increase of 10 percentage points year- over-year driven by elevated energy prices,” the company said.
Operating earnings before tax and accounting adjustments for depreciation and debt servicings hit P2.8 billion, 26 percent lower than 2021.
Operating EBITDA margin was at 13.8 percent, down 4.7 percentage points.
“2022 was a challenging year, as economic and political uncertainty translated to unprecedented cost increases, while industry demand softened. We expect 2023 to be a year of transition for our company. We anticipate that market conditions and cost inflation will remain challenging through the first half of the year. Nevertheless, we expect to start to see the benefit of our efforts to reduce cost as the year progresses,” said Luis Franco, CHP president. – Ruelle Castro
