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TCL losses double in first half
The after-tax losses suffered by Trinidad Cement Ltd (TCL) during the first six months of 2012 were more than double the Claxton Bay cement producer’s loss in 2011, according to the company’s second quarter report which was published this week. TCL’s loss in the period from January 1 to June 30 amounted to $169 million, compared with the $78 .2 million loss the company reported for the first six months of 2011.
For the first six months of 2012, TCL’s group revenue totalled $789.0m, which was 3.7 per cent more than the revenues reported in 2011, mainly “due to higher pricing as domestic and export cement volumes were 5 per cent and 24 per cent respectively lower than the prior year comparatives.”
The TCL financial report indicated that the T&T and Barbados markets saw volume declines of 12 per cent and 11 per cent respectively due to soft demand whilst the lower exports were due to reduced production as a result of the labour strike in Trinidad and plant difficulties in Barbados.
TCL noted that its Earnings before Interest, Taxes, Depreciation and Amortisation (Ebitda) declined to $33.9 million in 2012 compared with $42.6 million for the prior year period, attributing the shortfall of expectations to the fact that “the first six months was significantly affected by the general labour strike at the Trinidad plant which started on February 27 and continued to May 26.”
TCL said that it incurred additional restructuring expenses of $40.3 million in the six months as the execution of the debt restructuring agreements did not take place until May 10 and all conditions precedent satisfied until June 15. The company said that the expenses have to be recorded in the month in which the legal and other advisory services are rendered.
As a result of the debt restructuring agreement, on TCL’s balance sheet, loans amounting to $1.9 billion have been reclassified from current into loan term as the group completed on June 15 its debt restructuring exercise. Repayment will commence in March 2013 and spread until December 2018 when a bullet payment representing 42.6 per cent of the restructured debt will be payable, TCL said.
Addressing the company’s outlook, the TCL financial statement said: “With the debt restructuring exercise completed, the group has refocused on its businesses in a still challenging environment.” TCL said during the period of the strike, cement and clinker were imported to ensure the domestic market was adequately supplied at a higher cost to the group, which meant that export sales from the Trinidad plant were not possible.
“The plants in Jamaica and Barbados, at the same time, were not able to achieve expected production levels, suffering numerous breakdowns, due to inadequate spares as a result of a lack of working capital. The working capital difficulty was remedied in the last week of June with the execution of two sales contracts which resulted in advanced payments of US$12m into the group,” according to TCL.
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