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Challenges linger at Arawak

BEA DOTTIN, [email protected]

Challenges linger at Arawak

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Regional manufacturing group Trinidad Cement Limited is reporting a major jump in earnings over the last nine months.
But concerns remain about the performance of its Barbados subsidiary Arawak Cement Company Limited, which has been hampered by “unplanned stoppages due to technical problems”.
Group Chairman Andy Bhajan and Group CEO Dr Rollin Bertrand, commenting in TCL’s consolidated interim financial report for the nine months ending September 30, 2013, also said the Checker Hall, St Lucy company would continued to be hurt by the “very low” demand for cement in Barbados.
In the period reviewed, TCL, which has plants here, in Trinidad and Jamaica, had earnings before interest, taxes, depreciation and amortization (EBITDA) of TT$346.6 million (BDS$103.5 million), a 191 per cent increase compared to the TT$119 million for the same time last year.
This improved performance was attributed to “an increase of 23 per cent (or TT$275 million) in Group Revenue to TT$1.4 billion “compared with the prior year period as domestic volumes increased by 16 per cent, notably in Trinidad and to a lesser extent Jamaica, and a 26 per cent increase in export volumes in combination with higher selling prices”.
The officials also said higher production of clinker by 15 per cent and cement by 19 per cent contributed to the enhanced results and that for the quarter ended September 30 EBITDA was marginally down at TT$85.4 million compared to TT$87.5 million for the prior year quarter.
Bhajan and Bertrand also outlined their concerns about the Trinidad and Barbados plants in particular.
“Whilst group revenue for the quarter increased by $69.7 million (or 16 per cent) to $496 million, unplanned stoppages due to technical problems at the Trinidad and Barbados plants hampered production and efficiency with the consequence of higher unit costs. The technical issues at the Trinidad plant have been resolved. Finance costs for the 2013 quarter are lower than the prior year quarter largely due to higher foreign exchange losses included in the prior year total,” they informed shareholders.
“Earnings per share (EPS) for the nine months ended September 30, 2013, amounted to 28.2 cents compared with the prior year restated loss per share of 63.4 cents. For the 2013 third quarter, EPS was 2.5 cents compared with a restated loss per share of 3.1 cents in the prior year quarter. The Group has met all its debt service payments and financial ratio covenants under the debt restructuring agreement with lenders.”
As for the outlook, they did not appear hopeful of an immediate performance turnaround in Barbados.
“The Barbados operations have had plant challenges for most of 2013 and results have been made worse by very low domestic demand due to the global economic crisis. Critical repairs are being done in the fourth quarter 2013,” the financial report said.
“The operations and financial performance of the Jamaican plant have improved to the extent that it is now marginally profitable and continued improvement is anticipated. Notwithstanding the third-quarter challenges, the Trinidad and Tobago operations are delivering exceptional results and this trend is expected to continue throughout 2014 on the strength of the many major construction projects outlined in government’s annual budget presentation,” it added. (SC)