Caribbean Cement Company Limited (CCCL) closed the third quarter cash positive and has turned around a J$707-million operating loss into J$15 million of operating profit.

Domestic sales of cement remains weak, falling eight per cent year-on-year in the July-September 2012 quarter, as did exports which shrunk 35 per cent, while clinker sales were nil. Still, the Rockfort plant collected slightly more revenues in the period, J$2.14 billion compared to J$2.05 billion in the 2011 period.

Caribbean Cement pegged the declining home market to the weak economy, falling housing starts, and a diminished construction sector overall.

"Clinker and cement production exceeded the previous year's figures by seven per cent and five per cent, respectively, thereby adding to the bottom line through better absorption of overheads," said the company's earnings report.

"Unfortunately, the significant improvement in operations was not matched by improved sales volumes, resulting in a significant build-up in inventories of both cement and clinker."

The cement stock has suffered under the weight of the company's financial troubles, falling to a low of 89 cents this week. It has traded at a high of J$3.30 in the past year.

CCCL reported a third-quarter loss of J$245 million, or just about a quarter of the J$827-million loss (J$551m after tax credits) racked up in the similar period in 2011.

For the nine-month period, Caribbean Cement underperformed on domestic sales, which fell 1.6 per cent, but improved its cement exports, which was sufficient to grow revenue from J$6 billion to J$6.8 billion. Clinker volume exports were non-existent in the period, compared to more than 31,000 tonnes the prior year.

The company was J$748 million in the red on operations, and made a net loss of J$1.45 billion in the January-September period to improve on the J$2-billion loss before tax credits reported the previous year.

Losses have now accumulated to J$5.6 billion on the company's balance sheet, and the company is sporting negative equity of J$1 billion as a result.

Its operating cash position, however, was positive at J$370 million compared to negative cash of J$95 million the previous year.

Among other leads, Caribbean Cement is banking on a deal with Venezuela - yet to be finalised - to grow exports and reinvigorate sales growth in the company.

business@gleanerjm.com

Caribbean Cement Company Jan-Sept 2012 performance