Carib Cement Q2 profit jumps 41%

Profit at Jamaica’s sole cement producer, Caribbean Cement rose 41 percent in the June quarter, to $521 million from $368 million for the comparable quarter in 2019 and thus reverses the poor first-quarter performance, with results that fell 57 percent.
For the six months to June, profit fell 33 percent from $1.5 billion in 2019 to $1 million for the 2020 half-year. First-quarter profit fell sharply from that in 2019 to just $483 million, with the major repairs and maintenance of the plant carried out in the first quarter compared with the second quarter in 2019. Foreign exchange losses also contributed to the fall in the profit for the March quarter.
Sale revenues rose two percent for the June quarter to $4.78 billion from $4.68 billion and for the year to date, to $9.33 billion, from $9.13 billion in 2019.
Gross profit was flat for the first half of the year at $4.1 billion but grew 13 percent in the June quarter by from $2 billion in 2019, to $2.25 billion.
Administrative and Other expenses rose three percent to $604 million in the quarter and increased nine percent in the six months to $1.25 billion. Finance cost declined 28 percent in the quarter, from $231 million in 2019 to $167 million and dropped by 29 percent from $468 million to $330 million for the six months. The company repaid $231 billion in loans for the year to June, and This will help in reducing interest expenses going forward, including the second half of the current year. Losses incurred primarily on loans denominated in foreign currency resulted in foreign currency losses of $167 million, 18 percent lower than a loss of $231 million for the second quarter of 2019 but increased 69 percent for the year to date, to $658 million from $390 million in 2019.

Caribbean Cement silos

Depreciation charge was flat at $401 million for the June quarter and was slightly down to $765 million for the half-year. Provision for corporate profit taxation, jumped 70 percent in the June quarter to $526 million and is up 34 percent for the half-year to $739 million.
Gross cash flow amounted to $2.7 billion, after repaying loans and spending $342 million on new fixed assets and working capital needs, the company ended the half with $527 in cash funds. At the end of June, current assets stood at $3.2 billion, down from $3.47 billion at the end of 2019 and current liabilities ended the period at $4.75 billion.  At the end of December, shareholders’ equity stood at $9.3 billion and borrowings at $10.35 billion compared to $13.8 billion at the end of June 2019.
Earnings per share came in at 61 cents for the quarter and $1.18 for the half-year, with a net asset value of $11 per share. IC is forecasting a profit of $3.50 per share for 2020 and places the value of the stock at a PE of 13 times earnings and four times net asset value, based on the last price of $46 the stock traded on the Jamaica Stock Exchange.

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