TCL rallies through 2020 on $1.7b in revenue

Oilfield Workers' Trade Union (OWTU) chief labour relations officer Lindon Mendoza meets with employees listed to be retrenched at TCL's packaging plant in Claxton Bay, Trinidad on January 31, 2021. Photo by Marvin Hamilton -
Oilfield Workers' Trade Union (OWTU) chief labour relations officer Lindon Mendoza meets with employees listed to be retrenched at TCL's packaging plant in Claxton Bay, Trinidad on January 31, 2021. Photo by Marvin Hamilton -

The Trinidad Cement Ltd Group had fluctuating fortunes in 2020 to rally through the covid19 pandemic-hit year to $1.7 billion in revenue.

Much of the turnaround occurred in the last quarter of the year, where despite a net loss of $34 million, consolidated revenue grew to $433 million.

Overall, the group's revenue rose by a nominal one per cent over 2019 to $1.692 billion but was buoyed by the fourth quarter's 11 per cent increase in consolidated revenue.

"The increase was mainly due to higher volumes in Trinidad, and Jamaica," chairman David Inglefield and managing director Francisco Aguilera Mendoza said in the directors statement of the group's 2020 financials. The group's operations are spread across the region and includes Barbados and Mexico, under its majority shareholder Cemex.

The group’s adjusted earnings before interest, taxation, depreciation and amortisation (Ebitda) amounted to $111.3 million, an increase of 76 per cent, in the fourth quarter compared to 2019. Ebitda rose 20 per cent year-over-year to $440 million.

"This growth reflects the contribution of the new higher-margin business segments in Trinidad and the positive impact of operational efficiencies through the improvement to our main equipment and operational processes," the directors reported.

Financial expenses of $27 million were an increase compared to the fourth quarter in 2019 due to the exchange rate for the Jamaican dollar. Last August, the Jamaican dollar hit the $150 mark against the US dollar, the lowest in eight years. And in February, the group's Trinidad subsidiary closed its packaging plant which displaced about 50 workers.

The group reported a net loss of $34 million in the fourth quarter, but overall net income for the year was $15 million, similar to 2019. It generated $71 million in cash from operations, a 47 per cent increase.

"The improved cash flow resulted from the increase in operating income, efficient working capital management and stringent management of all other discretionary cash flow items.

"Capital expenditure during the quarter was restricted to essential maintenance and projects, with all other projects deferred for the time being. The TCL Group invested $69 million in the quarter in critical capital expenditure.

"Year to date, the TCL Group generated $364 million in cash from operations and repaid $248 million of debt."

The directors statement said the group's outlook would continue to be influenced by the pandemic as the pace of recovery of the economies where it operates remains uncertain.

"While we believe we have seen the worst in terms of government-mandated lockdown measures, the outlook for the business will depend on the trajectory of the outbreak as well as the depth of the economic slowdown and the resilience of these markets.

"Additionally, the arrival of covid19 added to the challenges to our business that existed prior to the impact of the pandemic in the region. These include weak economic growth in many of the regional economies over the last few years and imports of cement into the region. Management and the board have developed plans to address possible scenarios and continue to respond to the pandemic as we gain more visibility on near-term outlook."

Commenting on the ways it helped communities, the group said its outreached focused on health and sanitation, providing PPEs, thermometers and sanitisers, as well as enhancing virtual education through the donation of laptops, internet connectivity devices and school supplies."

"The safety of our employees and associated stakeholders remains our top priority."

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