Concepcion Industrial Corp., maker of air conditioners and refrigerators, reported Monday that its net income for the first nine months of the year fell 2 percent to P927.06 million from P944.87 million a year earlier. The company attributed the decline to “margin compression and factory-related challenges.”
“This was partly mitigated by higher equity earnings from associate and lower FX (foreign exchange) loss compared to last year,” it said.
Sales for the period rose 3 percent to P13.95 billion from P13.6 billion, mainly due to strong performance in its commercial business. With contributions from associate Concepcion Midea Inc., total group net sales grew 11 percent to P19.6 billion.
For the third quarter alone, income fell sharply by 35 percent to P141.48 million from P218.2 million, citing lower margins from factory under-absorption. Net sales rose 2 percent to P3.88 billion, supported by refrigeration, laundry, other appliances, and commercial businesses, partly offset by weaker demand for residential air conditioners.
The company said its consumer segment recorded P9.7 billion in net sales for the nine months, down 3 percent from last year. “The decrease was mainly due to lower air conditioning category sales, driven by softer consumer demand during the peak season which extended into the third quarter. The shift toward more affordable product tiers also affected the mix,” it said. This was partially offset by 17 percent growth in refrigeration and 63 percent growth in appliances, including laundry, kitchen, and small household products.
Commercial business sales rose 18 percent to P4.2 billion, driven by air conditioning equipment for commercial projects and strong contractor network performance in the first half of the year. Additional contributions from elevator equipment sales and aftermarket service revenues helped boost results.
The company noted the residential property market gained momentum, particularly in condominiums, though buyers remained “cautious and selective in light of macro uncertainty.” The office market showed steady growth, supported by demand from the IT-BPM sector and traditional office occupiers.
