Thursday, April 25, 2024

NOT ALL BLACK AND WHITE: Once more, Barbados beckons for ANSA McAL

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THE OBVIOUS attraction of Barbados as an investment jurisdiction for ANSA McAL is that it is close to Trinidad, the home of our parent company, wrote Nicholas Mouttet in the 2012 edition of Business Barbados. “Plus,” he added, “it is English-speaking, so we have no communication problems.”

 After a few more comments about the Barbados market (small, he noted but beefed up by tourists) Mouttet closed by saying that despite the island’s economic problems, “We believe that this is a good time to invest in Barbados.”

That was the year ANSA McAl severed several of its subsidiaries’ top executives here. According to the Nation of July 14, 2012, “With more than $150 million invested in the Barbados companies over the past three years, Mouttet said the island was the worst performer of all ANSA McAL’s investments in the region, registering losses in some companies.”

In its last financial year, 2014 (yearend Dec. 31), ANSA McAl reported total third party revenue of just over TT$6.1 billion, two per cent down from the previous year. About one-sixth of that revenue was earned in Barbados, about TT$990 million, according to Page 135 of the group’s annual report, which works out to about BDS$312 million.

 As a group, ANSA McAl earned a profit-before-tax of $1.07 billion, and a net profit of TT$802 million, which was down from TT$874 million the previous year. The net profit earned in Barbados was not stated.

By comparison, Massy Holdings Ltd. had much larger revenue last year (year-end Sept. 30) than ANSA McAl, and earned 30% of it in Barbados. But its profit-before-tax was lower than ANSA McAl’s, at TT$832 million and so was its net profit, which was reported at TT$600 million, slightly up from TT$587 million the previous year.

The Barbados pre-tax profit was TT$283 million (about BDS$90 million) before rebranding costs (remember, the whole Massy logo placement on every other building in the country?)

And finally, for this postcard comparison, despite its lower net earnings, Massy Holdings’ earnings per share were higher than ANSA McAl’s, at TT$5.69 to ANSA’s TT$3.97.

Massy’s EPS was up two per cent while ANSA’s was down around seven per cent.

I have not been able to do some sort of comparison of each segment of these large Trinidadian companies to see why they are producing their reported results, and as they are so complex, I probably wouldn’t understand it all anyway.

All I can say is, Barbados must have something to do with Massy share shares performing better than ANSA McAl’s, given the fact that the Massy revenue from Barbados, compared to total revenue, is twice that of ANSA McAl’s, 30% to just over 16%.

In hard numbers, ANSA last year earned, as I noted above, about TT$990 million in gross revenue here in Barbados, while Massy Holdings earned TT$3.3 billion, or just over BDS$1 billion.

So, I am only trying to make the point that seems clear to me in light of all this, which is that ANSA wants more of Barbados, period. The new acquisition target is Banks Holdings, and like a lighthouse suddenly starting to flash its lantern in a dark and stormy night, Barbados once more beckons for ANSA McAl, despite the reefs in its way (read: AmBev)

At around BDS$180 million in revenue or just under TT$600 million, it won’t mean that ANSA will suddenly overtake Massy in terms of Barbados revenue, but it would help. Not to mention letting its rival know that it is still not over losing BS&T.

Patrick Hoyos is a journalist and publisher specialising in business. Next week look out for Caswell Franklyn.

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