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Cemex still feeling the impact of Naga landslide

The APO Cement plant in Naga, Cebu. (Photo from Cemex Facebook)

The deadly landslide near the APO cement plant in the City of Naga, Cebu in September 2018 continued to impact on the performance of Cemex Holdings Philippines, Inc. in the first quarter of 2019.

In a disclosure to the Philippine Stock Exchange, Cemex said its domestic cement volumes decreased by 1% year-on-year during the quarter as sales volumes were still recovering at the start of the year from the impact of the landslide.

Cement prices, meanwhile, were 4% higher sequentially during the quarter, reflecting a consolidation of price adjustments implemented in December 2018 due to the impact of the landslide.

Sales volumes, however, increased throughout the quarter, reaching an all-time high in monthly sales volume in March as demand was sustained by a strong residential sector and public infrastructure spending.

The company earlier reported a net loss of P930 million in 2018 following the landslide, which killed 80 people.

The landslide had forced the shutdown of APO Land and Quarry Corporation, principal raw materials provider of Cemex subsidiary APO Cement Corporation in Naga.

APO Cement operations also had to halt for nearly three months, compelling Cemex to source raw materials from other sources.

While net sales in the first quarter increased 6% year-on-year, the cost of sales was at a high of 63% compared to 58% in the same period in 2018.

Cemex traced this to cement imports and outsourced clinker carried over resulting from the Naga landslide incident.

The high cost of sales, however, were mitigated by higher year-on-year prices, resulting in a 7% increase in operating EBITDA (earnings before interest, tax, depreciation and amortization).

Operating EBITDA margin during the quarter was slightly higher year-on-year at 18%. (Ventures Cebu)

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