Reforms, spending seen to lift construction firms 

AFTER their dismal showing last year, listed construction companies are expected to benefit from the economy’s further reopening, government reforms, and infrastructure spending.

“The delivery of more reform measures, especially fiscal reform measures and other economic reform measures that would help further ease limits on foreign ownership, would help attract the entry of more foreign investment,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Mr. Ricafort said that amendments to existing laws such as the Public Services Act, Retail Trade Liberalization Act, and Foreign Investment Act would help boost market confidence, creating economic opportunities and spur more construction activities.

“The further reopening of the local economy towards greater normalcy and continued increase in infrastructure spending would still be bright spots for the economy, thereby could still support further growth in the construction industry, going forward,” he added.

In a Viber message, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said: “The local construction industry should remain robust, supported by the government’s efforts, despite rising inflationary pressures and the tightening of monetary policy.”

In 2022, most of the listed construction companies posted a decline in their attributable net income, with only Concrete Aggregates Corp. registering profit growth. Megawide Construction Corp. has yet to disclose its full-year results.

“Sudden margin pressures arising from Russia-Ukraine tensions possibly led to these [income decline],” Mr. Limlingan said.

Mr. Ricafort said higher prices and interest rates that led to higher financing costs could have dragged investments and the overall pace of construction activities.

Concrete Aggregates posted a 10% jump in its attributable net income to P23.15 million in 2022 from P21.05 million in 2021.

The growth came about after the company booked a 5.2% increase in its top line to P40.58 million last year from P38.59 million in the previous year. The company posted a 6.3% increase in its operating expenses to P17.06 million from P16.05 million.

EEI Corp. posted an attributable net income of P209.21 million in 2022, down 57.3% from P489.7 million in 2021.

The company registered a 9.3% decline in its revenues to P14.65 billion last year from P16.15 billion in the year prior. It incurred an equity loss amounting to P105.85 million and foreign exchange losses of P19.73 million.

Holcim Philippines, Inc.’s attributable net income declined by 63.3% to P941.78 million in 2022, from P2.56 billion in the previous year. The decline is on the back of a 1.3% decrease in its top line to P26.59 billion last year, from P26.95 billion in 2021.

Holcim also incurred additional expenses, including the P700 million paid to Seasia Nectar Port Services, Inc. to settle a case last year.

Cemex Holdings Philippines, Inc. suffered a net loss of P1.01 billion in 2022, a reversal of the P725.53-million net income in 2021.

Its revenues slipped by 1.5% to P20.57 billion last year from P20.89 billion in 2021, while it registered a 6.5% increase in its cost of sales amounting to P13.82 billion in 2022 from P12.98 billion in 2021.

In 2022, the company also incurred foreign exchange losses amounting to P934.08 million, more than twice higher than the P437.49 million in 2021. — Justine Irish D. Tabile