PORT-OF-SPAIN, Trinidad, Thursday February 26, 2015, CMC – The cash-strapped Trinidad Cement Limited (TCL) says it profit before taxes fell by TT$136 million (One TT dollar =US$0.16 cents) last year despite an increase in revenue from the sale of the products in 2014.
TCL chief executive officer Alejandro Ramirez, said the company, with operations in Jamaica and Barbados, had in 2013 recorded an after tax profit of TT$67 million.
He said that in 2013, pre-tax profit stood at TT$39 million while in 2014, TCL recorded a loss of TT$97 million however sales increased nine per cent to TT $2.1 billion in 2014.
“The EBITDA (earnings before interest, tax, depreciation and amortisation) remained flat,” Ramirez said, adding that “it was TT$408 million flat against 2013.
“Despite that increase in the sales, EBITDA didn’t increase because there were some extraordinary items that affected the results,” he said, noting that these “extraordinary” expenses totalled TT$57 million and included the impairment of weather damaged clinker which was stored outside TCL’s Barbados subsidiary Arawak Cement Company for several years.
He said that the 51,000 tonnes of the clinker have not been used in years and based on an assessment of its quality it was decided that 50 per cent of its value (TT$20 million) would be decreased.
““We also have TT$12 million of back-payment that we had to do regarding the arrangement we came to with the union. Also there was six million dollar of legal cost on cases against the shareholders.
“Then we have TT$19 million of an unsuccessful debt refinancing exercise that the company took in May of last year, so that totalled TT$57 million. So if we compare on a like-to-like basis, excluding these extraordinary items, you can see that the EBITDA is 13 per cent. So in an operative basis it improved.”.
Acting group finance manager Parasram Heerah noted that one of the main drivers of the company’s poor financial results over the last few years was the performance of Arawak Cement Company.
He said management has looked at the assets of Arawak as well as the projection based on its existing performance and it was determined that the future value of those assets was not sufficient. He said as a result, TCL had to impair $153 million of the Barbados subsidiary.
The company also announced that an additional three million dollars was impaired when operations of a terminal in Haiti was stopped.
“We had a situation where we were paying a monthly rental on a piece of land in Haiti which we had been doing for several years and this was costing us more than US$800,000 a year.
“There was absolutely no activity done in Haiti through that piece of land so maintaining it was a no-brainer. We had to get out of there,” said TCL chairman Wilfred Espinet.