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Trinidad protest boosts Carib Cement's sales

Aug, 08 2012

(Trinidad)  --  "The directors consider that the outlook will remain challenging, despite some recent positive indicators of growth in the domestic market for cement and plans for expansion into more lucrative export markets," said Brian Young, chairman, and Dr Rollin Bertrand, group chief executive officer in a joint statement which accompanied the financials.

The group revealed that it is currently negotiating the supply of a "relatively large" amount of cement to a new customer under a three-year contract.

"That contract will make a significant contribution to the group's forecasted turnover and net cash flow over the contract period," said the directors, who added that the group was also pursuing a strategic initiative with a regional cement producer, which would provide an opportunity for increased sales.

The group actually rocketed its cash-flow position to $290 million, which reversed its negative liquidity a year earlier. In addition, the reclassification of its short-term debt to long term, resulting from its recent debt restructuring agreement, allowed it to record positive working capital. The group more than halved its negative equity to $794 million from $2.1 billion a year ago.

The company's management said that operationally some of the challenges were addressed and total sales jumped 22 per cent over the review period to $2.4 billion. The increase in sales resulted from supplying its parent plant, Trinidad Cement Limited, with stock following a strike in that country.

Temporary windfall

"As mentioned in the first quarter directors' statement, the labour strike at our parent company, Trinidad Cement Limited, resulted in increased exports at very favourable prices during this period, providing a temporary windfall to Carib Cement," said the directors' report.

The company's working capital improved from a negative $588 million position at December 2011 to a positive $610 million at June 30, 2012.

"This change was mainly due to short-term debt being transferred to long term as part of the debt restructuring agreement," said the directors. The group's equity, however, showed a negative position of $794 million, and consequently, Carib Cement continues to rely on the support of its parent company to continue to operate.

The company said its improved cash flow from operations would allow it to purchase critical spares and consumables to support plant operations. The company entered into two contracts to supply bulk cement to Haiti and the Eastern Caribbean, and said all efforts have been directed to maintain the increased export volumes over the coming months.

"The domestic market continues to remain depressed and very competitive, with the continuing presence of dumped cement in the market. However, we have continued to grow our exports sales and expect to make further strides in this area over the rest of the year," the company said.

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