Carib Cement post record profits

Profits at Caribbean Cement Company for the nine months to September came in at a record $4.25 billion up 35.7 percent compared to $3.1 billion in 2021 and almost matches the $4.34 billion of profits for the 2021 fiscal year.
Profit of $1.2 billion after tax was realized for the quarter to September compared to just $44 million in the similar period in 2021, resulting in earnings per share of $1.42 in the 2022 quarter and $5 for the nine months, compared to $3.68 for the nine months in 2021.
Third quarter revenues were lower than that of the June quarter of $6.7 billion, with profit coming lower as well by $240 million. Profit for the full year could end up at $6.50 per share or close to that.
The record profit performance emanates from revenues that rose 12 percent the $6.2 billion in the 2022 September quarter compared to $5.5 billion in the similar quarter of 2021 and $19.7 billion for the nine months this year versus $17.8 billion dollars in 2021. The company had no major repairs and maintenance expenditures during the period to date, unlike in 2021.
Cost of sales for the September quarter this year came out at $3.4 billion compared to $4.4 billion in 2021 but was flat for the year to date compared to 2021 at $10.8 billion.
Yago Castro, the managing director in his report to shareholders in reference to the improved profit performance, stated “that it is primarily due to reduction of cost of sales as a percentage of net sales to 56 percent from 80 percent in the same period last year. This cost reduction was attributed to the company’s decision not to undertake its planned major maintenance through the third quarter of the year compared to 2021 which was executed in July to August, this postponement of the planned maintenance is attributed to the excellent output of some of the cement kiln this year as well as delay in the arrival of key spare parts needed to conduct the general overall works.”
Administrative and other operating expenses increased to $700 million from $592 million for the quarter and rose to $2 billion from 1.85 billion for the nine months. Finance costs rose from $112 million in the 2021 third quarter to $154 million in September 2022 quarter while the nine months cost rose from $412 million to just $430 million in 2022.

Carib Cement plant

Taxation absorb $517 million for the September 2022 two quarter versus $291 million in 2021 and $1.5 billion for the nine months to September 2022 versus $1.1 million in 2021.
Cash flow generated from operating activities amounted to $2.2 billion dollars in the quarter and $3.8 billion for the nine months after paying $1.17 billion in dividends, the company’s cash position improved by $300 million to $1.1 billion in the quarter.
At the end of the quarter shareholders’ equity stood at $18.75 billion, up from $14.8 billion in 2021. Borrowed funds amount to $1.8 billion. Current assets amounted to $7.5 billion while current liabilities ended the quarter at $8.2 billion.
The company announced plans earlier this year to expand the plant capacity by 30 percent which is slated to cost $40 million and is to be completed by the second half of 2024, the chairman of the company Paris-Lyew Ayee reported.
The stock last traded at $57.50 on Friday on the Main Market of the Jamaica Stock Exchange with a PE of 8.8 times this year’s earnings, which is well below the market average of 13.6.

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