Caribbean Cement banking on mega projects to sustain momentum
Published:Friday | March 1, 2024 | 12:08 AM
Caribbean Cement Company’s performance beat wider construction sector activity, but its bottom line growth was moderate at just three to four per cent.
The outlook for Jamaica’s sole cement maker and producer of the Carib Cement brand remains robust due to large ongoing construction projects.
Caribbean Cement made annual profit of $5.6 billion for 2023, up $200 million, or 3.5 per cent, year-on-year. That equated to earnings per share of $6.55, compared to $6.33 in 2022. Revenue totalled $27.7 billion, reflecting a 7.3 per cent growth at a time when the construction sector was last reported by the Planning Institute of Jamaica as having contracted by 2.8 per cent.
The profit growth was due to higher revenue as well as cost-containment measures.
The company also strengthened its cash holdings, from $574 million to $4 billion, despite capital expenditures and increased dividend payments. Operating cash also strengthened from $4.2 billion to $7.5 billion.
Last year, Caribbean Cement paid out $1.6 billion in dividends, up from $1.26 billion in 2022, when it ended a near two-decade hiatus on distributions to shareholders. Some of that period, from around 2009 to 2012, was marked by sustained losses at the company due to heavy finance costs related to arrangements with direct parent company Trinidad Cement Limited. Cemex, which is the ultimate parent for Caribbean Cement and Trinidad Cement, revised the arrangement subsequent to it acquisition of the regional cement business in 2017, putting the Jamaican plant on the path to greater profitability.
Caribbean Cement now generates record earnings aided by the boom in construction that arose from the pandemic. It has resulted in solid gains for the Rockfort, Kingston-based company as the primary provider of cement in the island. In 2023, Caribbean Cement earned three times the $1.88 billion in net profit reported before the onset of the pandemic in 2019.
In its newly released earnings report, the company noted that it will strive to keep cement available to its customers, despite being close to its full capacity of one million tonnes.
“We are continuing to deploy investments to ensure that we can better satisfy the local market demand, prioritising a reliable supply of our brands and allocating any spare capacity where necessary, as was previously done with the export of 7,000 metric tonnes of high-early strength cement to the Turks and Caicos Islands and St Kitts and Nevis,” it said.
Caribbean Cement, which is now led by Jorge Martinez as managing director, holds assets totalling $33 billion, with its largest being its plant at Rockfort in Kingston. It holds capital of $24 billion, from $20 billion a year earlier, reflecting increased profit at the company.
Martinez replaced Yago Castro last November, after Castro was promoted within the wider Cemex group.