Trinidad Cement Ltd reported a loss of J$80.8m (US$0.95m) for the quarter ended September 30 and announced that it was seeking a restructuring of its debt.
In the directors’ statement, TCL chairman Andy Bhajan and its chief executive, Rollin Bertrand described the results as “very disappointing but not unexpected.
“Whilst our Trinidad businesses remained profitable notwithstanding lower demand levels, heavy losses were incurred by the Jamaican and Barbadian subsidiaries due to continued depressed market conditions,” according to the directors’ statement. Those two markets declined by a further 17 per cent and 20 per cent respectively in 2010. TCL said that “persistently heavy rainfall throughout the region further hindered sales in the third quarter.”
As a result of the low sales, the company stated, the kiln in Jamaica was taken out of service for 40 days in order to monetise high inventories and the Barbados plant is undertaking a similar shutdown in the fourth quarter. These lower plant utilisation rates resulted in expected heavy losses due to the high proportion of fixed costs that are incurred at each plant. TCL stated that it had seen “indications of increased demand, particularly in Jamaica and Trinidad over the past two months” which suggests that a slow recovery has started in our markets.
TCL said the cement manufacturer had embarked on a debt restructuring exercise which seeks to defer principal repayments on long-term loans due in 2011-2013 and convert short-term loans into longer term facilities. “As compensation to lenders, the Group has proposed a reasonable increase in the rates of interest and security for unsecured lines,” it said. Principally due to heavy losses incurred by the subsidiaries in Jamaica and Barbados, the Group has breached its short-term borrowings and current ratio covenants.