Mar 2010 Financial News

Carib Cement closes '09 on $145-m loss

Mar 03, 2010

THE Caribbean Cement Company (CCC) recorded a $69.7-million net loss for its fourth quarter which was nearly half the $144.5 million loss recorded for the entire 12 months ending December 31, 2009.

The company was hurt by competition and the ongoing recession, which hiked its operating costs during 2009, according to just released financials. The first two months of 2010 confirm that the local market is worsening, but the company added that it was optimistic about growing its exports.

"The loss for the year is primarily due to the contraction in the Jamaican economy which took place throughout 2009, resulting in the domestic market for cement declining by approximately eight per cent over the previous year. The decline in the domestic market and the loss of local market sales, due to tariff-free imported cement, resulted in our silos and storage facilities becoming frequently full, resulting in production stoppages," stated notes accompanying the financials.

The locally based company with Trinidad and Tobago-based ownership began operating its new kiln in the latter part of 2009. However, during the fourth quarter its revenues declined to $1.9 billion versus $2.2 billion in the prior year's quarter.

CCC is optimistic that it can grow its export to its seven overseas markets during 2010.

"Optimising throughput is essential to achieving the company's profit potential. This means that rapid growth in our export sales is critical to our survival," stated the company.

In the fourth quarter, CCC sold 156,000 tonnes of cement which was 23 per cent of its annualised sales of 652,650 tonnes. The company did not export clinker during the fourth quarter. During the December quarter, CCC exported 29,200 tonnes of cement, which was 32 per cent of exports for the year.

CCC stated that its cement exports in 2009 was "seven times our cement exports for 2008 and, worthy of note, is almost 150 per cent of total tariff-free imported cement sold in the local market for 2009".

"Notwithstanding the foregoing, to achieve this level of exports, we have had to sell on the basis of marginal pricing and therefore the profit contribution and cash generation are reduced, but the alternative of stopping production is less beneficial," said company statements endorsed by Brian Young, chairman and Dr Rollin Bertrand, group chief executive officer.

The subsidiary, Jamaican Gypsum and Quarries, nearly doubled its after-tax profit to $143.5 million which compares to a profit after tax of $72.4 million for the previous year. "This was primarily due to better control over costs rather than increased revenue," stated the company.

The CCC had filed a claim against Domicem of the Dominican Republic and Vulcan of the USA for the dumping of cement into Jamaica and the resulting injury and damage caused to its business.

"We are anticipating a favourable ruling by the Antidumping and Subsidies Commission in the upcoming months," asserted CCC.


Source:
Jamaica Observer
Wednesday, March 03, 2010

http://www.jamaicaobserver.com/business/Carib-cement-posts-loss_7459376