May 2009 Financial News

Carib Cement announces 20% reduction in profit

May 06, 2009

CARIBBEAN CEMENT Company is reporting a 20 per cent reduction in profits over the first quarter of 2009, when compared to the corresponding period last year.

The company attributes the decline in performance to $199 million in "foreign exchange translation losses", which have been included in the finance costs. Expenses jumped from $11,440 to $234,536 for the corresponding period.

Despite the losses, Carib Cement, in its recently released financials, reported net profit for the first quarter of $130 million, against $160 million for the same period last year. Operating profit climbed from $242m to $418.6m, an increase of 73 per cent.

"This improvement was due to the efficiency of operating one new kiln compared to two aged kilns in the previous year," Brian Young, chairman of CCC, said in his statement to shareholders.

Positive impact

The installation of the new kiln also positively impacted the performance of CCC's parent company, Trinidad Cement Limited (TCL), which has experienced a nine per cent increase in operating profit - $95.7 million for the first quarter of 2009, up from $87.7 million for the same period last year.

"This improvement in operating profit was achieved due to production efficiencies from our new kiln 5 in Jamaica, stabilisation of the petcoke fuel system in Barbados and lower fuel prices," noted TCL's chairman, Andy Bhajan, and group CEO, Rollin Bertrand. Clinker production also reached an historic 80,220 metric tons.

The kiln is part of a US$100-million factory modernisation, which is now nearing completion.

"Construction of the new mill is expected to be completed by the end of the second quarter, and the commissioning process will continue into the third quarter, "Young disclosed. "In anticipation of increased cement production, we will continue our aggressive marketing programme, with a view to mitigating our exposure to foreign exchange risk," he added.

Despite the softening of the construction sector, which negatively impacted the demand for its products, the group chairman is expressing optimism that the expansion programme will result in the company competing more effectively in the region and expanding their market share.


Source:
Mark Titus, Staff Reporter
mark.titus@gleanerjm.com
Jamaica Gleaner
Wednesday May 6, 2009

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