PRC Posts 8.5% Earnings Jump

uerto Rican Cement (PRC) (NYSE: PRN) reported an 8.5% increase in 1999 earnings of US$12mn, (US$2.29/share), versus US$11.4mn, (US$2.11/share), for the comparable 1998 period. Consolidated sales for 1999 were US$173mn, a 17% increase over 1998's US$148mn consolidated. Results for 1999 benefited from higher sales volume both in the cement and ready mix operations. Cement sales in 1999 increased by 21% to 1,255,000t compared to the year before, while ready mix sales increased by 20%. Cement plant production in 1999 increased by 10% in clinker and 22% in cement over the prior year. As a result of increased sales and production in 1999, the gross margin improved to 26.9% from 26.7% in 1998. Results for 4Q99 were in-line with expectations. Consolidated sales increased US$1.1mn to US$37.1mn for 4Q99 from US$36mn for 4Q98. Gross margins for 4Q99 did not change at 23.3% compared with 23.9% for 4Q98, despite increased production costs due to a marked increase in the price of aggregates and increased labor costs. For 4Q99 the company reported net income of US$1.2mn compared with US$2.03mn in 1998. That is a difficult comparison, however, because of a non-recurring gain of US$220,000 on the sales of certain non-core properties. The 4Q99 includes over US$500,000 in charges related to several small items, which are expected to be non-recurrent. PRC produces cement and related products, including Portland Gray cement and hydrated lime, concrete, multiwall paper bags, polypropylene bags, and engages in realty operations.