Trinidad Cement sees third consecutive quarterly loss

Trinidad Cement sees third consecutive quarterly loss
27 June 2011

Trinidad Cement Limited (TCL) reported a loss per share of $0.09 for the 1Q ended March 31, 2011, representing its third consecutive quarterly loss.

TCL’s revenue during the first three months of 2011 contracted 11.0 per cent compared to last year moving from US$425.5m to US$378.6m as revenue from most of its segments experienced declines. Revenue from TCL’s cement segment was down 9.2 per cent YoY to $345.9m.

The Group reported an operating loss of $5.3m for the 1Q versus an operating profit of $65.0m in the 1Q of 2010.

TCL is in the progress of reaching an agreement with its creditors for restructuring approximately $2bn in debt. The TCL Group submitted proposals for the re-profiling of its debt to Lenders. For the debt restructuring exercise, Lenders are being advised by FTI Consulting Canada ULC, while the TCL Group is being advised by BroadSpan Capital LLC. It is expected that the restructuring exercise will be completed by the Q3 2011.

Over the short term, TCL’s revenue may face pressures from the domestic sector as inactivity in the construction sector will continue to impact cement demand. Aside from this, TCL faces greater concerns in its regional production plants in Barbados and Jamaica. The Jamaican operations may encounter difficulties increasing its revenue as the TCL subsidiary CCCL faces competition from "dumped" imported cement. In fact, recently the TCL Group was unsuccessful in an anti-dumping matter and had to shut down kilns in Jamaica. To add to this, a recent article in a Jamaican newspaper indicated that CCCL may face some rivalry from the Canadian conglomerate, Cemcorp. According to the article, Cemcorp, which will operate under the name Cement Jamaica, has an initial production target that is equivalent to around 30 per cent of CCCL’s annual sales volume. Cemcorp is planning for a 2013 start of operation.

Published under Cement News