Caribbean Cement revenue, profit soar as parent TCL falters
Caribbean Cement Company Limited emerged unscathed from the board takeover that rocked its parent last summer, to produce annual pretax profits of $255 million compared to a loss of $3 million the previous year.
Its performance was assisted by a new record year for sales for the Rockfort, Kingston-based operation, which climbed from $12 billion to $14.3 billion at year end December 2014.
Domestic cement sales volumes grew by only one per cent to 594,164, while cement exports inched up to 232,765 tonnes. Clinker exports, however, quintupled to 155,423 tonnes because
of a supply agreement with Venezuela.
Over in Claxton Bay, the home base of Trinidad Cement Limited, the group also reported an overall climb in revenue from TT$1.93 billion to TT$2.1 billion, which TCL described as a record for the company. The cement producer also reported a narrow EBITDA gain from TT$407.7 million to TT$407.8 million.
However, it also booked a TT$153 million for losses linked to subsidiary Arawak Cement Company Limited, which served to cut operating profit for the year to TT$116 million, from TT$276 million the previous year.
Losses after taxes were more than TT$205 million on continuing operations, rising to TT$211 million when the discontinued operations of lossmaker Premix & Precast Concrete Inc of Barbados are taken into account.
The results wiped out the TT$67 million of profit after tax credits that TCL reported in 2013.
"Despite that increase in the sales, EBITDA didn't increase because there were some extraordinary items that affected the results," said acting chief executive and board director, Alejandro Ramirez.
Extraordinary expenses totalled TT$57 million and included the impairment of weather-damaged clinker that was stored outside Arawak Cement Company for several years, as well as back payments to unionised staff and legal costs, he said.
Trinidad Cement remains heavily indebted but its liabilities were largely flat at the end of 2014, at TT$2.76 billion, the majority $2.38 billion of which is due in the short term - a return to its pre-2012 status after the new Wilfred Espinet-led TCL board threw out the debt-restructuring plan that had been negotiated by the old board.
TCL is working out a new agreement with creditors and also plans to raise fresh capital of about TT$50 million from a rights issue that will open to shareholders on March 6, as it restructures its balance sheet.
Minority partner Cemex will underwrite US$45 million of the offer in exchange for a larger stake in TCL. Under the agreement, Cemex's current 20 per cent holdings will grow to between 35 and 40 per cent.
Jamaica's debt saw an uptick in the year to TT$4.89 billion, of which TT$3.8 billion is due in the short term.
The Rockfort operation reported that under the old group debt-restructuring programme, it booked a credit of $591 million in 2013 regarding withholding taxes associated with the operating lease paid to parent TCL.
Caribbean Cement, which is now chaired by Christopher Dehring, reported that in 2014 it reduced its finance charges by more than $800 million.
At the bottom line, the company made after-tax profit of $138 million compared to $114 million after tax credits in 2013.