Caribbean Cement Company seven-year low, Jamaica

Caribbean Cement Company seven-year low, Jamaica
Published: 23 May 2011

Caribbean Cement Company Limited (CCCL), despite its best performance to date on export sales, this week reported one of its worst years of operation in which cement supplied to the market hit a seven-year low and its operating losses climbed above J$2 billion.

Tax credits reduced the net loss to J$1.56 billion, or -J$1.83 per share, a result that was 10 times worse than the loss of J$144.5 million, or negative 17 cents per share, of 2009.

That result, some of it due to higher production costs linked to energy prices, as well as Caribbean Cement’s lack of working capital, has forced the indebted company to acknowledge its vulnerability.

"CCCL’s major productive assets, which are leased from TCL, and its own fixed and floating assets are included in the security for these loans, and should lenders enforce their security, there is a material risk that CCCL may not be able to continue as a going concern," said a note to the 2010 yearend financial statements.

The disclosure - which was similarly made by parent Trinidad Cement Limited - was repeated in the first-quarter statements, but Caribbean Cement said its directors "have a reasonable expectation" that deals being negotiated to open up new supply markets would pay off for the company.