(Trinidad Guardian) Trinidad Cement Ltd (TCL) recorded a 61 per cent decline in its after-tax profit for the three-month period ending March 31, 2017, the regional group headquartered in Claxton Bay reported yesterday.
In its summary, consolidated interim financial report published on the T&T Stock Exchange website, the group said it generated a total revenue of $422 million for the first quarter of 2017, which was 12 per cent lower than for the comparable period in 2016 when it generated $480 million.
TCL said the fall in its revenues was “due to lower domestic grey cement sales (-6 per cent), mainly reflective of a slowdown in the construction industry in Trinidad and Tobago—one of its major markets, compounded by increased competition in the Caribbean region.
“Positive trends continued in the Jamaica market, with a slight improvement in sales, which was created by increased demand in the retail trade and from tourism and infrastructural projects. In Barbados, cement volumes were driven by the residential and commercial sectors.”
TCL’s group earnings before interest, taxes, depreciation, loss on disposal of property, plant and equipment, and manpower and stockholding restructuring costs (adjusted EBITDA) was $97.5 million, a decline of 36.5 per cent compared with the year-earlier period. The $97.5 million in adjusted EBITDA reflected a margin of 23 per cent, which mainly resulted from lower volumes and increased electricity costs, the cement company said.
TCL said that it continued to manage its cash flow with the aim of further reducing its loan balance, and in February, was able to make a prepayment of $35 million. That payment meant that the group’s debt was reduced by 18 per cent when compared to the first quarter 2016 balance of $1.1 billion. The reduction of the group’s debt translated into its net interest expense for the period of $27.7 million, which was a 32 per cent decline compared to the Q1-2016 expense of $41 million.
According to TCL: “Subsequent to the end of the first quarter of 2017, the group has successfully prepaid and refinanced its existing debt mainly with proceeds from an inter-company loan with Cemex and cash on hand as well as a short-term facility provided by local financial institutions, substantially improving previous conditions.”
As a result of those transactions, TCL’s group debt was reduced to $927 million after the refinancing last month, which meant that its loan balance in April was 50 per cent of the balance at March 2015 when the amended override agreement was signed ($1.9 billion).
TCL is now majority owned by Mexican cement giant Cemex, which started a takeover bid for the locally listed company in December last year and closed it on January 26, moving its shareholding in TCL to 69.8 per cent from 39.5 per cent. Cemex paid a total consideration of US$86.4 million to acquire the 113,629,723 shares.
Addressing the cement group’s outlook, TCL chairman Wilfred Espinet and director Nigel Edwards said in their directors’ statement, which is dated April 27: “Despite the reduced demand in Trinidad and Tobago and pricing pressure in most of our markets, the board of directors remains confident of a positive contribution on profit this year, primarily attributed to operational programmes being implemented across the group along with cost savings which will come from restructuring initiatives completed last year.”
