Cement production hits record in 2nd quarter as profit surges fivefold

Jamaica’s sole cement producer, Caribbean Cement Company Ltd, has reported profit of $2.7 billion for the second quarter ended June 2026, nearly five times the $544 million earned in the corresponding period last year, because of increased production capacity and reconstruction demand following Hurricane Melissa.

The company's shares rose 2.5 per cent to close at $116.78 in the day's trading on the Jamaica Stock Exchange.

"Carib Cement achieved a record second-quarter sales volume of 110,647 metric tonnes, the highest ever recorded for the period," the directors said in the interim financial statements released this month.

"The company also delivered its strongest EBITDA performance to date, reflecting the resilience of the business and continued discipline in cost management."

Operating profit closely reflects EBITDA, which measures earnings before interest, taxation, depreciation and amortisation.

The company also benefited from the absence of a planned maintenance shutdown that had weighed on the prior year's results.

Carib Cement recently completed the US$42 million expansion of its industrial kiln furnace, which improved productivity. It's designed to lift its annual capacity from 1.0 million tonnes a year to 1.3 million.

In 2025, overall cement production fell to 864,000 tonnes, or its lowest since 2020 when the company produced 940,000 tonnes.

The company indicated that extended planned shutdowns and post-hurricane demand disruptions led to dips in production.

The company plans to do scheduled maintenance in its third quarter, between July and September.

For the six months ended June 30, net income more than doubled to $5.75 billion, from $2.54 billion a year earlier, while revenue rose 14 per cent to $18.57 billion from $16.3 billion.

Earnings per share for the half-year climbed to $6.75 from $2.98.

The profit surge was amplified by an improvement in margins.

Gross profit for the first half rose to $9.31 billion from $5.33 billion, lifting the gross margin to 50.2 per cent from 32.7 per cent.

The directors attributed the improvement to "stronger operating efficiency and a more favourable production environment compared with 2025, when the company incurred substantial costs associated with its planned maintenance shutdown”, including $920 million in additional related expenditure and imported cement to maintain market supply.

Six-month operating cash flow strengthened to $7.25 billion from $4.25 billion, and cash and cash equivalents stood at $18.5 billion at the end of June, from $11.6 billion held at year-end 2025.

The cash position includes $17.9 billion (US$112.9 million) held in a deposit investment account with parent company CEMEX Innovation Holding Limited, earning interest at the Secured Overnight Financing Rate plus 30 basis points.

A year earlier, it held US$53.7 million in that deposit account.

Shareholders' equity grew to $38.2 billion from $32.47 billion at December 2025.

Looking ahead, the company flagged that its planned maintenance shutdown, rescheduled from the first half, is expected to take place in July 2026, with sufficient inventories in place to support uninterrupted supply.

The board said it "remains confident in Carib Cement's ability to navigate the evolving business landscape" and described the company as "a trusted partner in the rebuilding of Jamaica".

Capital expenditure for the half-year totalled $394.9 million, down sharply from $3.16 billion in the prior-year period, when the company was investing in maintenance-related upgrades.

business@gleanerjm.com

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