Caribbean Cement hits sales milestone despite pandemic
Caribbean Cement Company Limited hit a new milestone in revenues that grew by double digits to top $20 billion for the first time, leading to record profit at the Rockfort, Kingston-based plant. But the maker of the Carib Cement brand, whose sales...
Caribbean Cement Company Limited hit a new milestone in revenues that grew by double digits to top $20 billion for the first time, leading to record profit at the Rockfort, Kingston-based plant.
But the maker of the Carib Cement brand, whose sales grew in percentage terms at twice the pace of the entire construction sector under the pandemic, was muted in its assessment of what lies ahead for the business.
“We continue to operate in an environment of significant uncertainty. Our strategy will focus to effectively manage the variables under our control,” said General Manager Yago Castro in the company’s newly released year-end financial report.
Full-year sales at Caribbean Cement, which is Mexican-owned, grew 13 per cent to $20.1 billion, from $17.8 billion in 2019. Operating profit climbed by $2 billion to $6.8 billion; while net profit nearly doubled from $1.88 billion to $3.2 billion, or $3.76 per share.
“The increase in revenue was related to the stronger domestic demand and the company’s capacity to supply the local market,” Castro said.
Caribbean Cement is the sole company in Jamaica that manufactures cement. Castro noted in the financials that 2020 was a record year for cement production due to the recent plant modernisation programme, and that the company hopes to leverage its capacity going forward.
The stock jumped over 11 per cent to $70.45 on the first trading day following the release of the results, but gave up some of those gains on Tuesday to close at $68.50.
Yago described the financial results as the culmination of “proactive decision-making, effective risk management and outstanding employee performance”.
Caribbean Cement paid down $4.7 billion in debt last year, double the $2.2 billion it paid in 2019. The repayment reduced liabilities, which benefited the financial position of the company. Group equity increased to $11.5 billion, up from $8.3 billion in 2019, and the company closed the year with cash holding steady within the $500-million range.
Except for the April-June quarter when the pandemic was at its fiercest, Caribbean Cement grew its quarterly net earnings over the course of the year. Still, sales in each quarter outpaced their comparative 2019 periods.
The construction sector, by contrast, experienced a decline in output for the first half of the year due to the initial onset of lockdown measures to stem the spread of COVID-19. Specifically, construction declined by 2.0 per cent in the March quarter, and a further 3.0 per cent in June, according to data from the Planning Institute of Jamaica. The sector then expanded in September by 5.0 per cent and a further 6.2 per cent in the December quarter.
Despite the increase in production and sales, Caribbean Cement said its operating costs were contained at levels similar to 2019, due to increased operational efficiencies that it credited to the plant upgrade.