Thu | Aug 24, 2017

Trinidad Cement suffers big fall in profit

Published:Friday | March 10, 2017 | 3:00 AM
The TCL plant at Claxton Bay in Trinidad & Tobago.

Regional producer Trinidad Cement Limited (TCL) made TT$52.4 million in net profit in 2016, which was a substantially worse performance than the previous years.

Profits fell 87 per cent from TT$428.8 million. It was due in part to reduced revenues at TT$1.8 billion, down from TT$2.1 billion a year earlier, but was the result of one-off refinancing gains of TT$200 million, which had boosted the 2015 results.

TCL, which is currently the only cross-listed equity on the Jamaica Stock Exchange, is in the process of delisting from this market, at a date to be signed off on by the JSE. The stock is already delisted in Barbados, but will continue to trade in Trinidad & Tobago.

The delisting in the two markets was part of plans announced by new owner Cemex last December when it made a takeover bid for majority control of TCL.

Cemex now controls 69.8 per cent of the regional cement maker, through Sierra Trading, up from 39.5 per cent.

As for business prospects going forward, Trinidad Cement expects construction activity will remain sluggish in Trinidad and Barbados this year, in the face of "increasingly aggressive competition in the region".

The Jamaican market has been growing domestically, but its exports were not as robust last year.

Creating long-term value

In its audited financial report for the year ending December 2016, TCL said in the wake of Cemex's takeover that the restructuring initiatives completed so far positions the group to create long-term value for shareholders.

It stressed plans to develop new markets for TCL.

During the year, the cement maker said its financial performance was impacted by a number of one-off charges amounting to TT$140 million - including TT$44.5 million from manpower restructuring exercises; TT$72 million in respect of overstocked spares which exceed the foreseeable operating requirements of the group and TT$7 million for obsolete inventory items.