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Carib Cement doubles profit to $2.5b

Published:Wednesday | February 27, 2019 | 12:27 AM

Jamaica’s sole manufacturer of cement set another record for revenue in its last financial year, in which it posted a profit of $2.47 billion.

The results follow the restructuring of inventory and manpower and other efficiency measures, as well as investments in the Rockfort, Kingston-based plant.

“The year 2018 marked the beginning of a period of stability for the company,” Caribbean Cement Company said in its financial report released last week. “Planned investments yielded expected outcomes in health and safety, production and operational efficiencies.”

Sales by the cement producer rose six per cent to $17.5 billion, while its net profit more than doubled from $1.1 billion or $1.31 per share to $2.47 billion or $2.90 per share.

It’s been five years since Caribbean Cement exited its dark period that was characterised by quarterly and annual losses from 2009 to 2013. The company and its parent were forced to restructure under debt refinancing programmes that Trinidad Cement Limited (TCL) negotiated with its creditors – deals that eventually resulted in TCL and Caribbean Cement coming under the control of Mexican construction giant Cemex.

Caribbean Cement regained control of its assets from immediate parent TCL last year, a US$118-million buy-back of the Rockfort plant that was mostly financed by large loans from Cemex. Consequently, Caribbean Cement’s fixed assets tripled from $8 billion to $24 billion.

But while the Kingston producer seems to have regained its footing and now has less than $1 billion of accumulated deficits left to deal with, Trinidad Cement is still meandering.

TCL made a loss of TT$7 million on flat revenue of TT$1.7 billion for the year ending December 2018. Its earnings, however, were an improvement on the TT$257 million net loss of 2017.

“We have made significant progress on our restructuring programme designed to achieve a competitive cost structure,” said TCL in market filings on the Port-of-Spain stock exchange. “While we expect some incremental restructuring costs to continue in 2019, we believe the majority of these investments are behind us,” the company said.