Mar 2017 Financial News

ANSA McAL looking at new acquisitions...as group’s net profit declines by 9.9%

Mar 24, 2017

Group chairman and CEO of the ANSA McAL Group Norman Sabga has signalled the conglomerate’s intent to bolster its growth through a number of acquisitions soon to be finalised.

“We are looking at two acquisitions right now. One is pretty close to finalization which would give us greater reach across the Caribbean in the manufacturing sector and significantly strengthen one of our existing businesses,” Sabga said as he presented the group’s 2016 financial results yesterday at the group’s head office in Port-of-Spain.

Sabga noted that the group’s 2016 performance was affected by a number of “one-off” events that impacted its revenue and profitability.

He said: “There were two setbacks that have impacted our results. Firstly, a fire at Carib Glass Limited resulted in the shut-down of one furnace, which impacted profitability by $38 million. Secondly, the increased rate of corporate taxation resulted in a one-off, non-cash hit to our after-tax earnings by $38 million.”

For the year ended December 2016, ANSA McAL recorded revenue of $6 billion, a 3.4 per cent decline from 2015 when the company registered revenue of $6.2 billion.

Sabga attributed the revenue decline to the sale of a supermarket chain in Barbados and the glass furnace fire.

The group also registered a 9.9 per cent decline in profit after tax, moving to $803 million in 2016 from $891 million in 2015.

The ANSA McAL chairman noted however, that in spite of the contraction in revenue and profit, the group was able to increase its dividend payment by $0.10 for 2016, increasing the total dividend to $1.50 per share in 2016 from $1.40 per share in 2015.

On a segment-by-segment basis, the group continues to make prudent investment decisions while realigning certain operations to better treat with the current business environment, Sabga said.

“We have invested in our OECS breweries. Our new brew house in St Kitts and new malt-handling system for Grenada will improve production efficiencies. Manufacturing production capacities have been expanded across the sector in coatings, glass bottling, film extrusion and plastics packaging. In media, the print optimisation will reduce costs. In financial services, the integration of Consolidated Finance Co Limited (CFC) in Barbados will accelerate ANSA Merchant Bank’s regional expansion plan,” he said.

In terms of completed acquisitions, Sabga said that the two made in 2016 are expected to generate healthy US dollar cashflows in 2017.

He said Easi Industrial Supplies Ltd (in T&T) and Indian River Beverage Corp (in Florida) have been integrated into their respective sectors and are expected to generate strong US dollar earnings in 2017.

Sabga said that the group is focused on capitalizing on opportunities as they presented themselves in spite of the economic slowdown .

He said: “We are seeing opportunity. We have not decided to sit back and say gloom and doom. The economy has shrunk, but its not in our DNA to take our foot off of the accelerator.”

Source:
Trinidad Guardian
Friday March 24, 2017

http://www.guardian.co.tt/business/2017-03-24/ansa-mcal-looking-new-acquisitions