Caribbean Cement FX losses cut into profit

Caribbean Cement FX losses cut into profit
Published: 06 May 2009

Caribbean Cement Company’s thrust into the export market enabled the company to mitigate against a declining domestic market but profits fell by 20 per cent during the quarter ending March 31, 2009.

The cement manufacturer reported net profit of J$130m for the review quarter, which was 20 per cent lower than the J$163m net profit it earned during the three months ending March 31, 2008.

The decline was due to significant foreign exchange translation losses, which were included in finance costs and which amounted to J$199m.

"Depreciation of our domestic currency in the current quarter was 10 per cent compared to 0.7 per cent in the similar quarter last year," company’s director statement to shareholders published in the financial statements for the March 2009 quarter.

The company’s operating profit, on the other hand, increased from J$242m during the March quarter of 2008 to J$419m during the comparative quarter this year.

This was achieved on higher sales revenue of J$2.6bn, up from J$2.3bn during the comparative quarter last year.

Carib Cement managed to increase its share of the domestic market from 82 per cent to 85 per cent as a result of lower-than-market decline in its cement sales domestically.

"While our estimates show that the local market declined by 14 per cent when compared with the first quarter in 2008, our local sales declined by 10 per cent resulting in an increase in our market share from 82 per cent (first quarter 2008) to 85 per cent in this quarter," said the company’s director statement.

For the review quarter, cement sales totalled 190,858t, four per cent lower than the comparative quarter in 2008.

To offset the decline in the domestic market Carib focused on growing its exports.