Many share­hold­ers of Trinidad Ce­ment Ltd (TCL) got news yes­ter­day that they have been wait­ing for sev­en years to hear—the di­rec­tors of the Clax­ton Bay-head­quar­tered ce­ment pro­duc­er an­nounced that it would rec­om­mend a fi­nal div­i­dend of $0.08 to the share­hold­ers of the com­pa­ny.

In a no­tice on the web­site of the Trinidad and To­ba­go Stock Ex­change (TTSE), TCL said, “On May 22, 2024, the board of di­rec­tors of TCL re­solved that a fi­nal div­i­dend of TT$0.08 per or­di­nary share be rec­om­mend­ed to the share­hold­ers of the com­pa­ny, at the an­nu­al meet­ing, for de­c­la­ra­tion pur­suant to the div­i­dend pol­i­cy.”

The com­pa­ny’s an­nu­al meet­ing is sched­uled to be held on Ju­ly 5, 2024 at the Hilton Trinidad and Con­fer­ence Cen­tre. In the no­tice, TCL said sub­ject to the de­c­la­ra­tion of the rec­om­mend­ed div­i­dend by the com­pa­ny’s share­hold­ers, “the pay­ment shall be made on Sep­tem­ber 9, 2024 to share­hold­ers list­ed on the reg­is­ter of mem­bers, as at a record date of Au­gust 13, 2024 and the ex-div­i­dend date of Au­gust 12, 2024.”

With is­sued share cap­i­tal of 374,647,704 shares, all share­hold­ers of the com­pa­ny will re­ceive a to­tal of $29.97 mil­lion. The Mex­i­can build­ing ma­te­ri­als com­pa­ny, Ce­mex, is TCL’s largest share­hold­er with 69.83 per cent of the com­pa­ny or 261,623,911 shares. It is es­ti­mat­ed that Ce­mex will re­ceive $20.92 mil­lion (US$3.08 mil­lion) as a re­sult of the $0.08 per share div­i­dend.

In its 2023 fi­nan­cial year, TCL gen­er­at­ed $2.22 bil­lion in rev­enue and earned $170.19 mil­lion in af­ter-tax prof­it. The com­pa­ny’s prof­it for 2023 was 194.4 per cent more than the $57.80 mil­lion it earned in 2022. For the first three months of its 2024 fi­nan­cial year, TCL de­clared $78.31 mil­lion in af­ter-tax prof­it com­pared to a loss of $1.68 mil­lion for the same pe­ri­od in 2023.

While many TCL share­hold­ers are hap­py about the de­c­la­ra­tion of the div­i­dend, some in­sti­tu­tion­al and in­di­vid­ual share­hold­ers com­plained yes­ter­day about the roy­al­ty that the ce­ment com­pa­ny’s board in­tro­duced in 2022.

In its 2023 an­nu­al re­port, TCL out­lined two ser­vice con­tracts that ex­ist be­tween Ce­mex and TCL. They are:

• “A mas­ter man­age­ment and busi­ness sup­port ser­vices and li­cence agree­ment dat­ed Jan­u­ary 21, 2022, un­der which TCL and var­i­ous sub­sidiaries of Ce­mex have es­tab­lished a gen­er­al frame­work for the cor­po­rate ser­vices pro­vid­ed by Ce­mex to TCL and cer­tain sub­sidiaries, as well as the pay­ment of roy­al­ties for the use of in­tel­lec­tu­al prop­er­ty owned by and li­censed by Ce­mex to TCL and cer­tain sub­sidiaries.”

• A tech­ni­cal and man­age­r­i­al ser­vices agree­ment, through which Ce­mex pro­vides sup­port to TCL by mak­ing avail­able suit­able, qual­i­fied and ex­pe­ri­enced ex­ec­u­tives to fill key po­si­tions, and to pro­vide train­ing as well as tech­ni­cal as­sis­tance to sup­port the group’s train­ing and ship­ping de­part­ments.

In its 2023 an­nu­al re­port, TCL dis­closed that it had en­tered in­to re­lat­ed-par­ty trans­ac­tions with Ce­mex, as a re­sult of which TCL paid its Mex­i­can par­ent $36.5 mil­lion in “roy­al­ties and man­age­ment fee ex­pens­es.”

In 2022, the to­tal fees paid to Ce­mex by TCL was $36.4 mil­lion.

In a no­tice post­ed on the web­site of the TTSE on Feb­ru­ary 2, 2022, TCL an­nounced the ex­e­cu­tion of the ser­vices and in­tel­lec­tu­al prop­er­ty agree­ments on Jan­u­ary 21, 2022, “ac­cord­ing to the terms and con­di­tions ap­proved at the com­pa­ny’s an­nu­al meet­ing of share­hold­ers on Sep­tem­ber 23, 2021.”

Un­der the agree­ments, TCL agreed to pay Ce­mex a fee not ex­ceed­ing four per cent of the lo­cal com­pa­ny’s con­sol­i­dat­ed net sales. That fee is for cor­po­rate ser­vices pro­vid­ed by Ce­mex to TCL, “as well as the pay­ment of roy­al­ties for the use of in­tel­lec­tu­al prop­er­ty owned by Ce­mex and li­censed by TCL.”

For its 2022 fi­nan­cial year, the an­nu­al fee ap­plic­a­ble to the agree­ments “shall be equal to two per cent of the con­sol­i­dat­ed net sales of TCL.”