A Time To Build Caribbean Cement Company Limited Annual ...

in December 2004. This bill effectively clears the way for the Company to implement its
expansion and modernization programme.
With the improving efficiency and productivity of the plant and a more facilitative market
environment, the Company can now focus on completing arrangements for its proposed
expansion and modernization programme. Over the next three years the Company intends
to spend a further USD100M in capital expenditure programmes, which will see significant
improvements in clinker and cement production capacity and overall efficiency by 2008. This
will enable us to continue to satisfy the increasing Jamaican market, and compete effectively in
the liberalized markets in the near future.
A preferred supplier for the main equipment to be installed in the expansion programme
has been selected and the Company is in negotiations with a leading financing institution to
provide financing for the programme. During the second quarter of this year, we expect to
finalize our arrangements for the expansion.
Shareholders would have
noted the investment public’s
affirmation of confidence in
Caribbean Cement Company’s
performance as share prices
have risen more than 260% in
the last fourteen months.
I wish to draw shareholders’
attention to the fact that
included in the 2004 earnings
per ordinary stock unit, 99
cents, is a one time recognition
of the deferred tax asset in JGQ
amounting to 27 cents per
ordinary stock unit.
On behalf of the Board of Directors, I
wish to commend our management
and staff for an outstanding
performance for 2004 and to
express our appreciation to you,
the Shareholders, for maintaining
confidence in the Company and have pleasure in recommending a dividend of seven cents per
ordinary share for the year 2004.
General Manager’s Report
During 2004, Caribbean Cement Company recorded a
consolidated profit of $842M (US$13.76M). Earnings per share
increased to ninety nine cents, up from fifty three cents in 2003.
This is the highest profit in the history of the Company and
f.l.a. haynes
represents an increase of 85% ($388M) over 2003 performance.
This performance includes a one time impact on the Profit & Loss account for 2004 of $231M
in a deferred tax credit as a result of the turnaround of the Company’s subsidiary Jamaica
Gypsum and Quarries Ltd. to profitability. It was also a year in which the Company recorded
increased cement sales of 33%, demonstrating that it could supply the entire domestic market,
and rewriting every production record once again.
1000
800
600
400
200
0
$M
GROUP OPERATING PROFIT
$MILLION
2002
640,317
2003
811,894
2004
893,000
Financial Performance
Review
Revenues, driven by a 33% increase
in cement sales volumes and a 56%
increase in revenue out of Jamaica
Gypsum and Quarries Ltd. increased
by $1.4B or 36% over the previous year.
Operating profit however increased
by only 9%, as increases in key inputs
continued to erode the gains being made
in productivity and efficiency.
The selling price of cement has been
held constant since July 2003. On the
other hand, over the last three years,
coal prices have increased by 40% and
the price of heavy fuel oil, used by the
electricity service, increased by 51%,
impacting key cost inputs. In addition,
Brian W. Young
Chairman
2004 ANNUAL REPORT 12 13
2004 ANNUAL REPORT