Caribbean Cement profit flat, but outlook elevated
Caribbean Cement Company Limited, CCC, the maker of Carib Cement, reported flat profit for its the March quarter, but is bullish on business in the periods ahead, pointing to a vibrant residential real estate market in particular.
“CCC remains encouraged about the future, especially given the recent actions by the Government of Jamaica to remove curfews and fully reopen the economy. The company is also heartened by the strong cement demand evidenced by several announcements from the Government and private developers to construct housing and luxury villas, especially those that will adopt an eco-friendly design,” the cement maker said in its newly released first-quarter earnings report.
Still, its optimism was somewhat tempered by global events and their knock-on effects on trade.
Russia’s war on Ukraine has served to upend commodity markets, leading to surging prices for oil, gas and grains, among others.
“CCC will remain vigilant about possible impacts on business continuity due to the ongoing conflicts in sections of Europe, which have caused increased costs in fuel, power, and shipping, as well as threats from new strains of the COVID-19 infection,” the company said.
In the January-March quarter, Caribbean Cement made a profit of $1.59 billion on revenue of $6.8 billion, compared to $1.53 billion on revenue of $5.97 billion a year earlier.
The 14 per cent growth in sales outpaced by five percentage points other Central America and Caribbean markets in the Cemex group, which were up 9 per cent, the Mexico-based construction giant reported last week.
Caribbean Cement is owned by Cemex, through Trinidad Cement Limited. The March-quarter results reflect a new royalty fee, which CCC started paying to Cemex in January. It amounted to $133.9 million over the quarter, or around two per cent of revenue.
The master agreement between Cemex and Caribbean Cement over use of the Mexico parent’s intellectual property allows for a fee of “up to 4 per cent” of revenues. This year, however, Caribbean Cement is being charged two per cent.