Concepcion Industrial Corp.

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CIC expects single-digit growth amid challenges

CONCEPCION Industrial Corp. (CIC) is looking at a single-digit growth in both earnings and revenues for the year, calling 2018 an “even more challenging year than 2017” due to inflationary pressures and the weakening peso.

“I think economy-wise, it will be even more challenging, with the full effect basically of inflation going up, continued peso devaluation,” CIC Chairman and Chief Executive Officer Raul Joseph A. Concepcion told reporters after the company’s annual shareholders’ meeting in Makati City on Wednesday, July 11.

Mr. Concepcion noted higher inflation — which accelerated to a fresh five-year high of 5.2% in June — may affect consumer spending over the near future.

“But as a company, we still look at single-digit growth,” he said.

The listed firm, which supplies air-conditioners, air-conditioning solutions, and refrigerators under the Carrier, Toshiba, Condura, and Kelvinator brands, was able to sell over a million appliances in 2017. CIC expects sales to grow in the teens for this year, as it introduces new products in the refrigeration and washing machines category.

“A lot of the things to make sure that we are strong is to keep on introducing new products. We had 25% more SKUs (stock keeping units) last year. This year, another 25% in terms of new product launches,” Mr. Concepcion said.

To support the introduction of new products, CIC plans to invest between P150 million to P200 million to expand capacity in existing plants.

CIC manufactures a select range of its air-conditioners inside a factory in Light Industry and Science Park, where it produces 500,000 air-conditioning units a year. It also has a manufacturing facility for refrigerators, with a capacity of 300,000 units per year.

To-date, Mr. Concepcion said the facilities’ utilization rate is at 70-80%. Should sales continue to grow at a pace of 15-20% in the coming years, the company’s manufacturing facilities are expected to be fully utilized soon.

Since the Philippine peso has been depreciating, the CIC official noted local manufacturing has also become more competitive. With this, the company is looking at locally producing some products that they used to import.

“With that, if you look at the horizon demand, penetration level, the capacity of our plants are not sufficient to handle that. So as early as now we are investing,” Mr. Concepcion said.

CIC reported on Wednesday that sales grew by 14% in the second quarter, while profit after tax after minority interest (PATAMI) went up by 12%.

“It’s partly because you have price increases, but the big part is demand of the consumers as well as operational efficiencies, new products that we’re doing,” Mr. Concepcion said.


...para sa akin basta Concepcion bulok! Tongue

CIC’s Q2 earnings rise on double-digit sales growth

CONCEPCION Industrial Corp. (CIC) posted a 14% growth in its attributable profit during the second quarter of 2018, fueled by a double-digit increase in sales of its products.

In a regulatory filing, the listed maker of air-conditioners and refrigerators reported a net income attributable to the parent of P402 million, versus the P352 million it booked in the same period a year ago. Net sales likewise jumped 14% to P4.62 billion for the quarter.

“We are pleased with the strong results coming out of the second quarter of 2018 as our team focused on delivering results based on cost reductions, precise strategic execution, and clear messaging across the organization in the midst of fluctuating exchange rates and high commodity prices,” CIC Chairman and Chief Executive Officer Raul Joseph A. Concepcion.


This brought the company’s six-month attributable profit to P566 million, relatively unchanged from the P570 million it generated in the first half of 2017. Net sales meanwhile went up by seven percent to P7.69 billion.

The company has been implementing initiatives to reduce its costs in the face of challenges in foreign exchange and commodity prices. CIC expects headwinds for the rest of the year which may affect profitability, but is confident it will be able to adapt in the short term.

CIC has recently formed a unit called Cortex, which will explore opportunities in technology and business model innovations. This includes manufacturing smart appliances that can monitor energy consumption to alert owners of their usage.

“The next six to twelve months are going to be exciting for CIC as we launch new products and services particularly in internet-of-things. These will be our initial foray into offering practical smart appliances and solutions to Filipino Consumers,” Mr. Concepcion said.


...bulok Concepcion Tongue

Concepcion Industrial profit slips 7%

CONCEPCION Industrial Corp. recorded a 7-percent drop in net income in the first nine months of the year to P1.1 billion due to unfavorable weather and higher inflation, among other factors. “This resulted to market slowdown in both the airconditioning and refrigeration segments,” it said. The company’s shares closed Thursday down 20 centavos at P35.80 apiece.

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CIC acquires tech start-up

CONCEPCION INDUSTRIAL Corp. (CIC) is investing in tech start-up Teko Solutions Asia, Inc., which has core interests in the appliance service and repair business.

In a statement issued Monday, the listed refrigerator and air-conditioner manufacturer said its wholly owned subsidiary Cortex Technologies Corp. has acquired a majority stake in Teko Solutions, operating under the name

“This acquisition reinforces Cortex’s commitment to explore emerging technology and find ways to leverage it across the CIC’s group of companies, as well as CIC’s focus on building better lives and business,” CIC President and Chief Executive Officer Sean Byrne was quoted as saying in a statement.

Teko Solutions gives customers real-time access to service and repairs for home appliances such as air-conditioners, refrigerators, washing machines, and water heaters. The company said it manages “self-employed, qualified, and screened entrepreneur technicians,” with more than 850 certified technicians within its platform.

The customer and technician interact through Teko Solutions’ website for a seamless experience. Here the customer is asked to submit an appliance service request. The technician will then proceed with the required service at the customer’s most convenient time, according to its website.

“There’s an obvious synergy between Teko and the aftersales services offered by many of CIC’s consumer brands, such as Carrier, Condura, Midea and Toshiba as our consumers demand convenient after-sales service using mobile and web technology,” Mr. Byrne said.

“With’s technology and business model, this venture gives CIC an opportunity to build a nationwide aftersales network creating an appealing employment opportunity for individuals with the right skills, motivation, and entrepreneurial spirit.”

CIC’s attributable profit dropped by 10.5% to P673 million in the first nine months of 2018, on the back of flat gross revenues t P10.34 billion.

Cortex is part of the firm’s investments in technology, which is expected contribute 20-25% of revenues by 2020. CIC said it will spend P80 million to develop the unit.

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