CONCEPCION Industrial Corp.’s first-half net income dropped 74 percent in the first six months of 2026 compared to a year ago, a result the company blamed on elevated operating costs, supply chain disruptions, softer retail demand and foreign exchange losses arising from a weaker peso.
In a quarterly report to the stock exchange, the listed appliance and building solutions provider said net income attributable to equity holders of the parent slumped to P136.9 million from P534.3 million while consolidated net income dropped 62 percent to P294.9 million from P785.6 million.
Net sales slipped two percent to P9.9 billion during the period, although consolidated sales including those of associate Concepcion Midea Inc. rose six percent to P14.9 billion.
Concepcion Industrial said the weaker peso pressured gross margins while softer retail demand led to reduced production volumes, resulting in factory under-absorption.
The commercial segment remained resilient, however, with first-half sales growing seven percent from a year ago to P3.1 billion, driven by demand for commercial air-conditioning projects, aftermarket parts and services, and other appliance categories sold through e-commerce channels, which were tempered by lower elevator sales due to delays in equipment arrivals.
“The consumer business experienced softer demand driven by lower sales in air conditioning and selected refrigeration products, while the commercial business continued to demonstrate resilience with robust sales of commercial air-conditioning projects and aftermarket parts and services,” the company said.
Gross profit declined seven percent to P3.0 billion while gross profit margin narrowed to 30.2 percent from 31.9 percent as higher input costs and lower production volumes increased manufacturing costs despite selective pricing actions.
Operating expenses rose five percent to P2.5 billion, mainly due to higher outbound distribution costs, increased provisions for impairment of receivables and lower expense-accrual reversals compared with the prior-year period.
Other operating loss stood at P82 million, primarily due to foreign exchange losses of P135 million as a result of the peso’s continued depreciation.
Finance costs amounted to P26.8 million, while lower equity earnings from associate Concepcion Midea also weighed on the bottom line after the unit booked higher provisions for impairment of receivables and foreign exchange movements.
For the second quarter alone, Concepcion Industrial said consolidated net sales slipped one percent to P5.1 billion while consolidated net income plunged 75 percent to P123.9 million. It cited the same factors for the weaker May to June earnings as the ongoing Middle East conflict continues to impact economies and consumer demand.
The company’s shares on Friday rose P0.14, or 1.12 percent, to close at P12.60 each.