May 2017 Financial News

Caribbean Cement profit dips 45 per cent

May 17, 2017

Claiming damage at one of its packaging plants in Jamaica earlier in the year, Caribbean Cement Ltd (CCL) has been shifting inventory from one island to another in a bid to meet demand. But even before the operation started, expenses for the group rose, leading to a fall-off in consolidated profit before tax of $528 million compared to a profit before tax of $952 million in the corresponding quarter - an adverse variance of $424 million.

For the quarter ended March 31, 2017, while revenue increased by $110 million compared to the comparative quarter in 2016, this was netted with the drawdown of clinker and cement (changes in inventories of finished goods and work in progress) valuing $357 million compared to a credit of $123 million in the same quarter in 2016, resulting in a variance of $480 million.

The company reported that right after the end of the period, more than 75,000 bags were delivered to the Jamaican market which was the most affected, with an additional 80,000 bags delivered to a local supplier via ship.

It promised that this level of supply will be maintained, with more than one million bags being delivered into the trade over the next month. It also suspended cement exports to focus resources and efforts on meeting local market demand.

The Trinidadian company also collected 75,000 bags from one of its sister plants, all in an effort to reduce any further issues in the market, with another 150,000 bags was to be delivered during April.

During the first quarter, repairs and maintenance were $36 million as a result of routine maintenance of cement mill #5 and the existing coal mill.

Earnings before interest, tax, deprec iation, amortisation, manpower restructuring costs and stockholding and inventory restructuring costs fell by 36 per cent below last year, resulting from the same impact of the stock drawdown.

The Group generated cash from operations of $197 million, or 64 per less than the corresponding period in 2016.

Net cash provided by operating activities was lower than the comparative quarter in 2016 by $146 million, mainly due to advances made to a related company as part of the Group's restructuring process. This will be recovered in the second quarter of 2017.

CCL said that implemented solutions along with investments and scheduled maintenance to improve efficiency will result in the needed improvement in the packaging area. “These initiatives will address the recent market concerns and will ensure stability in the local market,” it was noted.

Source:
BY AVIA COLLINDER
collindera@jamaicaobserver.com
Business reporter
Jamaica Observer
Wednesday May 17, 2017

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