Caribbean Cement posts loss with overhaul of mill
Caribbean Cement Company Limited's (CCC) overhaul of its kiln and cement mill contributed to the company posting a net loss during the September quarter.
The Kingston-based cement producer made a net loss of $81 million on revenues of $3.67 billion. That equates to quarterly earnings of negative 10 cents per share, down from a positive 72 cents a year earlier.
It is the first big loss in a number of quarters for CCC, which gained the favour of investors over the last 12 months based on its improved financial performance.
"During the reporting quarter, the company embarked on a major kiln overhaul which lasted 45 days and impacted the income statement by US$7.5 million ($970 million). Along with the capital expenditure of $622 million invested this quarter, this is expected to lead to an improved operational efficiency and reliability of the plant," said Chairman Parris Lyew-Ayee in a statement accompanying the earnings report.
Over nine months, Caribbean Cement experienced a reduction in net profit mainly due to its third-quarter overhaul. It posted net profit of $973.4 million over nine months in 2016 compared to $1.5 billion a year earlier.
"Other factors impacting the year-to-date performance were cement mill No. 4 overhaul, increased manpower restructuring costs, and stockholding and inventory restructuring costs," stated the company. It added that despite the reduction, local cement volumes increased by 18 per cent, arising from the 'good trend' of the infrastructural projects and demand at retail which, however, were tempered by the inclement weather conditions during the quarter.
The outlook for the parent company, Trinidad Cement Limited (TCL), remains positive as the overseas group continues to implement internationally competitive operating structures and procedures to ensure a sustainable and competitive level of profitability, liquidity and cash flow.
TCL revenue for the July-September quarter fell to TT$450 million from TT$550 million the previous year, while its earnings tanked from TT$84 million to TT$11 million this period.
Caribbean Cement's challenges relate to growing its cement and clinker exports, which dipped by 16 per cent and 84 per cent, respectively, in the review period.