Cement manufacturer CEMEX Holdings Philippines, Inc. said the massive landslide in the City of Naga, Cebu in September 2018 that forced the temporary shutdown of a subsidiary adversely affected its financial performance in the last quarter.
In a statement, CEMEX said it incurred a net loss after tax of P325 million in the fourth quarter. For the full year 2018, CEMEX reported a net loss of P930 million.
“The past quarter was a very challenging one following the landslide in Naga City. It tested the strength and resolve of all who were affected. The perseverance of the community was very inspiring even as we worked on restoring our operations to normality,” CEMEX president and CEO Ignacio Mijares said.
The September 20, 2018 landslide, which buried around 80 people, occurred near the quarry site of APO Land and Quarry Corporation, principal raw materials provider of CEMEX subsidiary APO Cement Corporation.
In the wake of the disaster, APO Land’s quarry operations and all other quarry operations in Central Visayas and seven other regions were suspended for 15 days.
APO Cement also had to shut down operations of its Naga, Cebu plant for nearly three months.
Because of the temporary shutdown, CEMEX said it was compelled to obtain raw materials from farther sources.
This resulted in an increase in cost of sales to 66%, as a percentage of sales, in the last quarter from 58% in the same period in 2017.
As a result, the company’s operating EBITDA margin went down during the fourth quarter, to 7% from 12%, and for full year 2018, to 12% from 15%, against the respective periods in 2017.
For the first nine months of 2018, operating EBITDA margin of CHP was at 14%, with the margin decline on a full year basis mainly due to the increase in cost of sales during the last quarter.
This lower operating EBITDA, together with higher financing and tax expenses, resulted in a net loss in the fourth quarter and in the entire year.
Despite the challenges, CEMEX said it achieved major operational highlights.
Production volume increased by 7% in 2018 on the back of healthy demand from both the private and public sectors.
Record volumes were achieved in the first half of 2018 as well as in the third quarter and sales revenues reached P23.4 billion in the entire 2018.
The company also said its cement plants were ranked among the top performing cement plants in the entire CEMEX global system in terms of health and safety, efficiency, and product quality.
CEMEX shares were down by 4.26% to P4.27 on February 8, 2019, following its disclosure on its financial performance. (Ventures Cebu)