By James A. Loyola
Eagle Cement Corporation (EAGLE) maintains its strong performance with a net profit growth of 8 percent in the first nine months of 2017 to P3.30 billion from P3.06 billion in the same period last year.
In a statement, EAGLE said the higher earnings came at the back of higher sales volume in the midst of tight competition.
Excluding IPO expenses, core net income increased by 10 percent. Likewise, EBITDA and EBIT margins in the same period remain robust at 44 percent and 39 percent, respectively.
Net sales increased by 12 percent from P10.05 billion in the first nine months of 2016 to P11.24 billion this year.
This growth was mainly due to the more than 20 percent jump in sales volume of bagged and bulk cement, partially offset by a decline in the average selling price of cement versus last year’s average.
The industry-wide concern on flooding of imports is continuing to put pressure on prices. Nevertheless, EAGLE’s advantage of having a new and state-of-the-art plant as well as its prudent cost structure, help keep the profitability above expectation.
Also, with its third production line in Bulacan to be commissioned in 2018, EAGLE said it is best poised to withstand the imports threat.
Cost of goods sold for the nine months ending September 30, 2017 went up by 19 percent, a slower pace than the 23 percent increase in volume due to a lower cost per bag reflecting the Company’s effective cost management efforts.
As a result, gross profit increased by 5 percent to R5.37 billion in the first nine months of 2017 at a gross margin rate of 48 percent.