Trinidad Cement revenues down 12%

Trinidad Cement Ltd (TCL) said its revenue for the first three months of the year was down by 12 per cent YoY to TTD422m (US$62.5m) due to a construction slowdown in one of its major markets and tougher regional competition.

Group volumes in 1Q17 were down six per cent YoY which the company said reflected a slowdown in Trinidad and Tobago construction activity, compounded by increased competition in the Caribbean region. However, TCL noted that positive trends continued in the Jamaican market, with a slight improvement in sales thanks to increased demand in retail trade, as well as from tourism and infrastructure projects. In Barbados cement volumes were a driven by the residential and commercial sectors, the group said in its  consolidated interim financial report published on the Trinidad and Tobago Stock Exchange website.

Profit after tax amounted to TTD26m in 1Q17, down 61 per cent compared to the TTD67.1m recorded in the comparative period of the previous year.  Group earnings before interest, taxes, depreciation, loss
on disposal of property, plant and equipment, and manpower and stockholding restructuring costs
(adjusted EBITDA) was TTD97.5m – reflecting an adjusted EBITDA margin of 23 per cent. This mainly resulted from lower volumes and increased electricity costs, it said.

The group continued to manage its cash flow with the aim of further reducing the loan balance, and in
February, was able to make a prepayment of TTD35m, paying down the debt by 18 per cent when compared to the balance of TTD1.1bn in 1Q16.

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.

TCL Group debt has been reduced to TTD927m after this refinancing and this balance is 50 per cent of the balance at March 2015 when the amended override agreement was signed.

Outlook
Despite the reduced demand in Trinidad and Tobago and pricing pressure in most of its markets, management said it remains confident of a positive contribution on profit this year. This is primarily attributed to operational programmes being implemented across the group along with cost savings which will come from restructuring initiatives completed last year.