A n n u a l R e p o r t 2 0 1 3
12
Annual Report 2013
The Context
The year 2013 marked a
time of recovery and return
to profitability for the TCL
Group. After three of the
most difficult years ever
faced in its sixty year history,
the Group showed its
resilience and perseverance
to effect a major turnaround
in its financial performance.
TCL (that is, the Trinidad
and Tobago operations)
recorded
its
highest
ever annual profit in the
history of the TCL Group.
The 2012 loss-making
subsidiaries (CCCL/ ACCL/
RML) significantly reduced
their decline in 2013, with
RML actually returning to
profitability. CCCL ended
the year by successfully
negotiating a long sought
after contract for the supply of 100,000 MT of clinker to
Venezuela under the Trade Compensation Mechanism of
the PetroCaribe Arrangement. The Group met all of its
debt refinancing payments and covenants and has been
doing so since the Debt Restructuring in May 2012. In the
midst of these positive developments, TCL was faced with
an unprecedented legal matter instituted by a minority
group of shareholders, which, it was subsequently
discovered, deeply involved one of our largest creditors.
Notwithstanding this legal action, the Group continues
to maintain its focus on its quest to bring value to
all stakeholders.
Global growth remained sluggish, averaging only 2.9% in
2013. Real GDP growth was relatively slow in emerging
markets and developing economies. In the Latin American
and the Caribbean Region, growth was somewhat
subdued. The Caribbean’s growth rate is expected
to increase from 1.7% in 2013 to 2.9% in 2014; with
forecast for the OECS at a moderate 2.0% in 2014, up
from 1.0% in 2013. Notwithstanding the prevailing global
and regional economic conditions, the Group has been
able to produce commendable results.
The Group’s financial performance is summarised below,
and is analysed in much greater detail in the Group CEO’s
Report and Management Discussion, which follows on
Page 18.
The Board of Directors is heartened by the significant
progress made to date in turning around the companies’
fortunes, especially in light of the depths from which the
Group has emerged. Strategic initiatives will continue
to be pursued and continued improvement and growth
is anticipated going forward. One major initiative is
a refinancing of the existing debt portfolio on more
favourable terms.
Summary Financial Performance
The financial performance of the Group improved
significantly, with Earnings before Interest, Tax,
Depreciation and Amortisation (EBITDA) increasing by
$234.9 million or 139% to $404.3 million reflecting a
margin of 20.8% compared with the previous year margin
of 10.5%. The improvement resulted from increases in key
operating metrics with domestic cement sales volumes
increasing by 13% (especially in Trinidad and Jamaica),
a 22% increase in cement export volumes and a 15%
increase in clinker production. The higher sales volumes
resulted in Group revenue increasing by $325 million or
20% compared with 2012.
The Group reported a profit after tax of $67.3 million
compared with a loss after tax of $344.5 million for
2012. The results for 2013 also benefitted from lower
depreciation, impairment charges, finance costs and
higher deferred tax credit compared with 2012.
For the fourth quarter ended December 2013, revenue
increased by $50.3 million or 13% over the fourth quarter
of 2012 while EBITDA improved by $42.4 million or 108%
compared to the corresponding 2012 period. However,
the final quarter of 2013 was negatively impacted by
lower sales volumes compared to the average of the prior
three quarters as well as production challenges at the
Barbados plant.
The Group’s financial position and liquidity continued to
strengthen over 2013 with all loan payments being made
and financial ratio covenants being achieved in accordance
with the Debt Restructuring Agreement.
Group Chairman’s Review
Mr. Andy J. Bhajan •
Chairman
The Board of Directors is heartened by the significant progress
made to date in turning around the companies’ fortunes, especially
in light of the depths from which the Group has emerged.
