CCC reports 57% decline in first quarter net profit

Date: April 27, 2020

Caribbean Cement Company Limited (CCC), for the three months ended March 2020, reported total revenue of $4.55 billion for the quarter, an increase of 2% increase when compared with the $4.45 billion reported in 2019.

Cost of sales amounted to $2.68 billion (2019: $2.30 billion), which resulted in gross profit of $1.87 billion for the quarter versus gross profit of $2.15 billion reported in the prior comparable quarter.

Operating expenses closed the quarter at $651.38 million (2019: $568.44 million), a 15% increase year over year. This led to a 23% decrease in operating profit before other income to total $1.22 billion versus $1.58 billion in the previous corresponding quarter. CCC noted that, “this decrease is mainly attributable to a year on year timing difference in the execution of the annual maintenance shutdown. This shutdown occurred in Q2 in 2019 rather than Q1 in 2020.”

Other expenses of $76.53 million was recorded for the period under review compared to other expenses of $44.13 million booked in the same period last quarter. As such, operating profit closed the quarter at $1.14 billion (2019: $1.54 billion), a 26% decrease year over year.

In addition, financial income amounted to $2.18 million (2019: $3.26 million). While, financial expenses closed the quarter at $163.78 million versus $236.04 million in the prior comparative quarter.

Notably, loss on foreign exchange closed the period under review at $281.96 million relative a gain on foreign exchange of $66.86 million booked in the same period last quarter.

Consequently, profit before taxation totaled $696.10 million compared to $1.37 billion booked last quarter of 2019. Management stated that the decline was, “due to a $0.3 billion foreign exchange loss versus a gain in 2019.” Taxation charges of $212.91 million (2019: $241.36 million) was incurred, thus resulting in consolidated net income of $483.19 million recorded for the period under review versus $1.13 billion documented in the prior corresponding quarter.

Total comprehensive income closed the period under review at $470.18 million (2019: $1.13 billion).

Consequently, earnings per share (EPS) amounted to $0.57 (2019: $1.33). The twelve months trailing earnings per share amounted $1.46. The number of shares used in this calculation was 851,136,591 shares. Notably, the stock price for CCC closed the trading period on April 27, 2020 at $45.66.

The Company mentioned that, “in keeping with our determination to operate responsibly and minimise our impact, we have made further investments in improving our environmental footprint and are pleased that our robust environmental management system has again resulted in our successful retention of the ISO 14001:2015 certification. Efficiency in the packing and loading processes has been boosted by the commissioning of two state-of-the-art palletisers, which have been installed as part of our plant modernisation programme.”

With respect to COVID-19 and CCC Actions, the Company highlighted that, “The Covid-19 pandemic is undoubtedly one of the greatest challenges of our times. Our action plans are therefore focused on maximising the protection of our employees while fostering operational resilience. In this regard, we have implemented multiple protocols and other measures, including but not limited to:

Focusing only on essential activities across our businesses to safeguard cash flows;

Developing and considering different contingency plans to prepare for the possibility of further extensions to the current shutdown;

Enhancing our communication with employees and all relevant stakeholders; and

Protecting our employees working within our facilities by: – Reinforcing physical distancing measures and personal hygiene; temperature testing of all entrants to facilities at access points; enhanced cleaning and disinfecting procedures at all facilities; and promoting remote work where possible according to job responsibilities.

Balance sheet at a Glance:

Total Assets as at March 31, 2020 amounted to $26.50 billion (2019: $26.82 billion), a slight 1% decline. The decrease in total assets was largely due to the decrease in property, plant and equipment which fell to a total of $23.39 billion (2019: $23.72 billion). Inventories however tempered this decrease in assets with a $222.91 million increase closing the period at $2.11 billion (2019: $1.89 billion).

Shareholders’ equity totaled $8.78 billion compared to the $7.54 billion quoted as at March 31, 2019. This resulted in a book value of $10.32 (2019: $8.85).

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