Carib Cement Reports Sturdy Annual Results

  • Local Cement manufacturer, Carib Cement Company Limited (CCC) generated J$5.95Bn in earnings for FY2024, 5.9% higher than in FY2023. Marginally higher topline performance – notwithstanding Hurricane Beryl1,   marginally lower direct costs and higher financial income which compensated for increases in operating expenses, were behind the modest growth in earnings.
  • Revenues came in at J$27.91Bn, 0.7% higher year-over-year as increases in sales of cement, clinker and other goods and services locally, in the Caribbean and Central & North America largely neutralized by an 11.2% decline in Q3 sales. The Q3 sales decline occurred because Hurricane Beryl and intense weather delayed the resumption of production after its annual maintenance shutdown.
  • Cost of goods sold (COGS) fell marginally (0.5%) and supported a 3.9% gross profit improvement to J$11.58Bn. The marginally lower COGS, reflect lower direct costs in Q1, Q2 and Q4, which were largely offset in Q3 when raw material costs were higher as production eventually rebounded following Beryl and the company purchased cement during its scheduled maintenance shutdown.
  • Unlike COGS, operating costs climbed by 5.7% due to higher administrative, selling, distribution and logistics expenses. Despite this, operating profit still increased by 1.4% to J$8.58Bn.
  • Looking ahead, CCC’s management remains confident about the future, particularly the growth potential within the local construction sector. Moreover, the completion of CCC’s major kiln expansion project, now in its final stages, is expected to further strengthen its market leadership, minimise supply disruptions from unexpected events like natural disasters and allow a sustainable cement export programme, which will bring additional foreign exchange earnings.
  • Year-to-date, CCC’s stock price is up 2.94%, closing at J$84.05 on Tuesday and a P/E of 11.72x.  This is below the Main Market Energy, Industrial and Materials Sector average P/E of 13.93x.

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1Hurricane Beryl and other adverse weather conditions that disrupted cement production and resulted in lost sales during the second half of the financial year.

(Source: CCC Financial Statements & NCBCM Research)