Despite stronger revenue performance, Caribbean Cement Company Limited (CCCL) ended its third quarter with less than half the profit it posted for the comparative quarter of 2017.
Net profit after taxes for the period amounted to $305 million with earnings per share at $0.36, down $0.52.
“The reduction in profit before taxation compared to the same period in 2017 was impacted by foreign exchange losses of $464 million and interest payments of $227 million. Both are related to the loans received to finance the acquisition of Kiln 5 and Mill 5. The acquisition of Kiln 5 and Mill 5, from our parent company Trinidad Cement Limited (TCL), and the termination of the equipment lease concluded in April 2018,” CCCL's Director Peter Donkersloot Ponce explained in the company's third-quarter report to shareholders.
The cement company also burned through a little over 70 per cent of cash and cash equivalents to total a balance of $467.5 million at the end of the nine-month period, up to September.
Nonetheless, the company saw growth in sales of sales per cent up to $4.5 billion for the third quarter ending September 2018, when compared to the same period of September 2017. Earnings before interest and taxes also improved.
“The positive result was due mainly to the company being more efficient on the plant, which resulted in lower costs being incurred in operation.
The termination of the operating lease arrangement with TCL and the increase in revenue have also contributed positively to the EBITDA amongst other strategic decisions that compensated for the impact of the increase in the variable cost from imported clinker and cement,” Donkersloot Ponce said.
According to the company, the $14.9-billion acquisition of Kiln 5 and Mill 5 represents a significant investment in plant and equipment, and improves the company's asset base. Property, plant and equipment of the company jumped by 201 per cent, moving from $7.7 billion as at September 2017 to $23.3 billion as at September 2018.