On March 30, 2023, Cemex Asian Sout East Corporation concluded its tender offer for Cemex Holdings Philippines (CHP) shares. Following the completion of the tender offer, Cemex Asian South East Corporation (CASEC) now owns and controls approximately 89.86% of the issued and outstanding common shares of CHP, leaving a public float of only 10.06%. The tender offer price was 1.30 a share, and CASEC spent 2.1 billion to pay the shares acquired through the tender offer.
The remaining public holders of CHP are mostly domestic retail traders/investors. Data shows that foreign institutional ownership of CHP is at just 0.42%.
PDTC report, as of June 30, 2023, indicates that COL Financial Group holds 285,454,887 shares of CHP out of the total shares of 10,623,732,256 lodged at PDTC. That would show COL Financial clients still holding 2.7% of CHP shared housed at PDTC.
PDTC stands for Philippine Depository & Trust Corp., a company that provides depository, registry, and intermediary services for various securities and financial instruments in the Philippines. COL Financial Group (COL) is among the largest retail broker, if not the largest. The remaining shareholders that were left out of the tender offer will have to contend with the poor results of CHP.
The remaining shareholders that were left out of the tender offer will have to contend with the poor results of CHP.
CHP announced that CHP’s domestic cement volumes decreased by 17% year-over-year for the first six months of 2023. The decline in volume was mainly attributable to subdued cement demand, a problematic prior year comparison, and heightened industry competition.
CHP’s cost of sales, as a percentage of net sales, was at 77.5% for the first six months of 2023, an increase of 15.9 percentage points year-over-year mainly due to higher fuel and power costs. CHP’s fuel cost, as a percentage of net sales, was at 26.8% year-to-date, an increase of 7.1 percentage points year-over-year, mainly driven by steep inflation in global energy prices in 2022. CHP’s power cost, as a percentage of net sales, was at 15.5% for the first half of 2023, an increase of 3.7 percentage points year-over-year resulting from higher power rates due to renegotiations of electricity contracts in the second half of 2022.
CHP recorded a net loss of PHP 662 million for the first six months of 2023, mainly due to lower operating earnings due to the significant year-over-year increase in the cost of sales and challenging market conditions.
For now, the remaining retail holders of CHP can pray for another tender offer from Cemex at 1.30 to privatize it. That is all their best hope for now.
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