May 2011 Financial News

CEO: We’re not insolvent

May 19, 2011

Trinidad Cement Limited (TCL) Group Director and Group Chief Executive Officer Dr Rollin Bertrand yesterday assured that despite two years of decline in revenue and “cash flow problems”, the company was not insolvent.

Audited yearly results showed TCL recorded a ten-percent decline in revenue of $179 million in 2010 following the 16- percent decline of $333 million recorded in 2009.

In a telephone interview, Bertrand said the group was experiencing cash flow problems as a consequence of contraction in the markets.

“The group however is looking to develop new markets which we have identified. With the current liquidity challenges we approached our lenders to see how our debt can be restructured and we plan to develop these markets to bring the group back to profitability,” he said.

He noted that the group was in various stages of entering markets in Brazil, Haiti, Dominican Republic and the French West Indies. “In Brazil we have two customers already so we have entered the market and will begin ramping up business, we already have two distributors in Haiti and we have signed a lease agreement to build a warehouse in Port-au-Prince. In the French West Indies we are in the process of getting certification with the authorities, it has been going on for 18 months but we are hopeful we would get a breakthrough in the next few markets,” Bertrand explained.

He said shareholders were concerned about the group’s performance but he was sure the plan would return it to profitability.

Auditor Ernst and Young said the group was not in compliance with certain loan ratio requirements and as such was in default of its obligations under various loan agreements. They said lenders could therefore initiate legal action to demand immediate repayment of outstanding loan obligations which the group was not in a position to immediately meet.

They added that this condition, along with other matters, indicated the existence of a “material uncertainty” that may impact on the group’s ability to continue as a going concern.

Meanwhile, the Readymix Group, a member of TCL, recorded a net loss of $3.4 million for 2010.

The depressed economic conditions and a marked decline in activities within the construction sector impacted negatively on the Readymix’s revenue and profitability.

Caribbean Cement Co Ltd, another subsidiary, recorded a net loss after tax of $1.56 billion compared to a loss of $145 million for the previous year. This was mainly due to a changing market mix of local and export sales which saw revenue falling by $939 million.

Domestic revenue fell by $1.1 billion as sales declined by a further 18.5 percent year over year.

Ernest and Young in their note said the TCL Group’s current liabilities exceeded its current assets by $839 million as at December 31, 2010.


Source:
By Darcel Choy
Newsday
Thursday May 19, 2011

http://www.newsday.co.tt/business/0,140732.html