Building stoppage pounds Holcim's full-year earnings

MANILA, Philippines — Listed cement-maker Holcim Philippines Inc. ended 2020 with earnings nearly halved after coronavirus lockdowns halted building and spared not even the booming construction sector.

Net profits of the local unit of LafargeHolcim Group fell 42% year-on-year to P2.1 billion in 2020, the company told the stock exchange on Monday. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), another metric of financial strength, went down 29% annually to P4.7 billion last year.

That Holcim managed to navigate through coronavirus and lockdowns without sinking into the red reflected the firm's resilience, John Stull, president and chief executive, said. On Monday, shares in Holcim Philippines inched up 0.65% to close at P6.23 each.

"We improved efficiency and sustainability of operations. We also introduced new building solutions and enhanced digital tools to better serve the customers," Stull said.

The pandemic's impact on Holcim's balance sheet was expected after lockdowns meant to arrest virus spread stalled construction activities, especially state-backed infrastructure projects driving cement demand. Holcim said market competition was already intense even prior to the pandemic, and softening of demand from the health crisis only exacerbated the pain.

On top of that, strong typhoons in the fourth quarter last year hampered the delivery of raw materials to production sites, only adding to the cement-maker's woes. As a consequence, Holcim Philippines' net sales sank 22% year-on-year to P26 billion.

But the company said "aggressive cost reductions in production, distribution and support process costs partially mitigated the topline decline." Distribution expenses decreased by 18% on-year, financial results showed.

Holcim Philippines also faced the pandemic with less debt burden after settling third party loans last year.

"Sustainable operations, new building products, and digital solutions will be focus areas in driving profitable growth," the company said.