Weak demand for cement products and the economic downturn around the Caribbean have chipped away at the profits of Claxton Bay producer Trinidad Cement Ltd.
For the half year ended June 30, 2009 group revenue declined by J$153m or 14 per cent compared to the first half of 2008, "due to the economic downturn affecting all our markets", group chairman Andy Bhajan and group chief executive Dr Rollin Bertrand said in TCL’s published interim financial report yesterday.
"All business segments experienced weak demand with domestic cement, export cement and premixed concrete volumes declining by 13 per cent, two per cent and 32 per cent respectively," the directors said.
The weak demand comes at a time when the local construction industry has slowed as major projects wrap up.
Caribbean markets are also buying less cement due to the effects of the global downturn on island nations.
The second quarter of the year was also affected by the shutdown of TCL’s four kilns for routine maintenance.
Notwithstanding the shortfalls, TCL’s group earnings before interest were J$236m, the same level as in the first half of 2008.
Profit before taxes for the first six months of this year was negatively affected by higher finance costs of J$32.1m, largely because of loans to fund construction of a new kiln and foreign exchange losses of J$18.4m incurred in Jamaica where that country’s dollar depreciated by 10.7 per cent over the half year.
Profits after tax stood at J$66.3m for 2009 so far, down from J$103.1m during the same period in 2008.
The TCL directors said the group was pursuing initiatives to increase sales volumes and reduce its foreign currency exposure in Jamaica.
The group said its was "cautiously optimistic" that the second half of the year will be better than the first half.