Caribbean Cement has cut losses by some 40 per cent to J$578.1m (US$6.5m) for the second quarter of the year and has outlined plans of a new supply contract but remains cautious on its outlook.
"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 said 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 company has improved its cash-flow position to J$290m, 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 J$794m from J$2.1bn a year ago. ales jumped 22 per cent over the review period to J$2.4bn.
The increase in sales resulted from supplying its parent plant, Trinidad Cement Limited, with stock following a strike in that country. "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 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.
On its outlook, Caribbean Cement said: "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.”
