Apr 2016 Financial News

Discounts reduce revenue for TCL, but cost cutting boosts profit

Apr 29, 2016

The first quarter in 2016 for Trinidad Cement Limited (TCL) produced profit of TT$55.5 million (US$1 =TT$6.64) — an increase of 30 per cent year over year.

For the period ended March 31, group revenue fell by seven per cent from TT$514.9 million in 2015 to $479.5 million, but cost savings, including a TT$15.4 million reduction in borrowing costs, were reflected in the bottom line.

Directors said in the quarterly report that efficiencies gained from the ongoing restructuring programme were also influential.

Overall, TCL saw an increase in EBITDA (earnings before interest, taxes, depreciation and amortisation) of TT$15.6 million or a five per cent improvement in EBITDA margins from 27 per cent to 32 per cent.

Sale volumes overall were seven per cent higher over 2015, driven by the domestic markets of Jamaica and Guyana.

However the fall in revenue from TT$514.9 million in 2015 to $479.5 came because of an average fall in domestic prices by 10 per cent during the quarter.

TCL said that in Trinidad & Tobago, the operation of Readymix as well as the volume of cement sales continued to be affected by the slowdown in the construction sector.

The company saw a reduced cash position from TT$548.34 million to TT$279.36 million at the quarter’s end in 2016.

TT$56.3 million was realised in cash from operating activities after investing TT$50.9 million in working capital, settling major suppliers and increasing inventory during the period.

In the just-released report for the year ended in 2015, Chairman Wilfred Espinet said the core business produced growth despite challenges “imposed by adverse economic conditions at the local, regional and international levels”.

While the company experienced an average five per cent reduction in demand for cement year over year across the region, especially in Barbados where it had increased competition, the group increased exports in other categories.

The volume for export sales of clinker grew by 16 per cent (clinker sold to Venezuela under the PetroCaribe Agreement) and third-party revenue in the ready-mix and aggregates business grew by 18 per cent. The increase in segment exports fed revenues of TT$2.1 billion which represented an increase of TT$12.4 million over 2014.

For 2015, profit after taxes was TT$428.8 million compared with losses of TT$211.0 million in the prior year.

TCL is a producer and marketer of cement and ready-mix products in the Caribbean with eight operatinwg companies in Trinidad, Barbados, Guyana, Jamaica and Anguilla.

The group is an associate company of global construction products company Cemex which owns 39.5 per cent in shareholding TCL.

Source:
BY AVIA COLLINDER
collindera@jamaicaobserver.com
Business reporter
Jamaica Observer
Friday April 29, 2016

http://www.jamaicaobserver.com/business/Discounts-reduce-revenue-for-TCL--but-cost-cutting-boosts-profit_59216