Profit continues at TCL but equity needed

TCementLTd280X150Profit for Trinidad Cement’s third quarter improved over the second quarter, with net profits of $30 million up from $18.7 million in the June quarter and just $6 million in the similar quarter in 2013. For the nine months to September, profit for the group’s shareholders amounted to $60 million versus $69 million in 2013.
The 2014 figures reflect cost of nearly $29 million associated with an attempt at restructuring the heavy debt the company has, but the 2013 results benefited from a tax credit of $27 million.The profit flowed from revenues of TT$514 million for the September quarter, an increase of only 3.6 percent from $496 million in 2013, and for the nine month in 2014, the Group recorded growth in revenue of $97 million or 6.5 percent, to reach $1.587 billion. “This improvement was driven by growth in the domestic cement markets in Trinidad and Jamaica, whilst the Barbados market remained relatively flat. In addition, concrete sales improved by 12.3 percent. In Jamaica, Caribbean Cement was able to supply 80,300 tonnes of clinker to Venezuela. Price increases were implemented in Trinidad, Jamaica and Guyana,“ management stated in a release with the financial report.
Net finance costs fell by $30 million, due to lower foreign exchange losses of $15.4 million and lower net interest cost of $14.3 million to hit $144 million for the nine months period. Finance cost fell to $47 million in the September quarter, compared with $51 million in 2013.
Operating Profit before Interest, taxes, depreciation and non-recurring items from continuing operations increased by $31 million or 9.6 percent to $125 million in the latest quarter and was $326 million for the nine months, to September versus $326 million in 2013. According to management “the increased revenue was eroded by escalating costs in Jamaica due to the depreciation of the Jamaican dollar and increased operating costs in Barbados.”
Earnings per Share amounted to 24.4 cents compared with 28.2 cents for the nine months period in 2013, but the latter was boosted by a large tax credit. For the quarter earnings per share amounted to 13 cents from continuing business.
Management stated that “The operations of Premix & Precast Concrete Inc. (Barbados), a subsidiary of Readymix West Indies, was discontinued in September due to the prolonged operating losses at this location, resulting in a loss of $3.4 million recorded for the quarter and $4.2 million for the nine months of 2014.”
The Board stated that they are currently negotiating with the financiers to have a restructured loan agreement. Negotiations are also in progress between the Company and the trade union to have an agreement with regard to retroactive payments for the expired collective agreements. A comprehensive financial and operational review of the Group is in progress and a restructuring plan, which seeks to secure the long-term viability of the Company, is scheduled to be completed by October.
The debt at the end of 2013 was just under $2 billion all of which has been switched to current liabilities as a result of the default occasioned by the decision of the company to suspend payment on the debt pending negotiation of the terms. Equity stood at $570 million at the end of September, well below the debt. All amounts are in TT dollars.
Trinidad Cement is list on the Trinidad, Jamaica, Guyana, Eastern Caribbean and Barbados stock exchanges.

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