Oct 2014 Financial News

Gas concerns for investors in US$850m plant. Massy rebranding spurs sales, Warner says…

Oct 06, 2014

The re-branding of the Neal & Massy group to simply Massy, has begun to show positive results, Massy president and group CEO Gervase Warner told reporters at the Hyatt Regency in Port-of-Spain after addressing an Employers Consultative Association (ECA) dinner. 

“In a nutshell, we’re now starting to get data, and we’re seeing that sales are improving well over where they were last year, and we feel that this (rebranding) was a good move, and it will redound to the benefit of our shareholders. I’m pretty certain that will be the case,” he said.

In June this year, Neal & Massy announced it was changing its name to Massy “as part of a comprehensive rebranding exercise that unifies all subsidiary companies to create a strong, consistent corporate identity,” the company had said in a statement. The Massy Group reported in its latest results “successful implementation” of its rebranding, saying revenues increased by $962 million to $8.5 billion for the nine months ended June 30.

Arthur Lok Jack’s successor, new Massy chairman Robert Bermudez said the group’s profit before tax increased by three per cent to $617 million before accounting for the one-off rebranding investment. 

In his report to shareholders, Bermudez said: “After a $59 million charge for the investment related to the group-wide rebranding programme, group profit before tax declined by 6.8 per cent versus prior year to $558 million and group earnings per share fell by $0.25 to $3.74.” He said without the rebranding investment, the group’s earnings per share would have increased by 4.5 per cent to $4.17.

The group’s new strategic direction focuses on activating existing synergies that connect products to relevant services, creating more efficient and cost-effective value propositions for consumers, the company said. “These synergies are defined as ecosystems in the context of the group,” Massy said.

For example, with respect to buying a new vehicle, customers have the option of purchasing a vehicle from Massy Motors, financing it through Massy Finance, and insuring it with Massy United Insurance, all under one roof. There are several ecosystems within the Group. The rebranding exercise unifies and identifies the elements of each one under a single recognisable name, the Massy statement said. 

Warner told the ECA audience that Massy will continue its corporate advertising campaign to demonstrate how Massy companies work together to simplify customers’ business transaction. He also sang the new Massy jingle.

Gas curtailments
Asked for an update on the planned US$850 million Mitsubishi methanol to dimethyl ether plants at La Brea Union Estate, Warner said: “Together with the ministry, the Japanese (Mitsubishi) and the Japanese Investment Bank in Tokyo, we’re really pushing to try to make this decision by next month, by November.” Asked what decision, he said: “You know, that the investors will get the money, and we will indeed build this plant.”

In a May 8 T&T Guardian story, Chikara Jitsumatsu, director of Caribbean Gas Chemical Ltd, the company formed to develop the project, had said a “final investment decision” was hoped to be reached by August/September 2014, after the date was brought forward from March 2014. Asked if gas curtailments concern him, Warner said: “It’s a big concern. That’s currently one of the challenges we have with the financiers—to get more assurance around that. That is a challenge.”

Asked if saying the project is at risk would be going too far, he said, “Yes, that would be going too far.” Questioned further about the strain it is putting on the plan, he said: “It’s kind of obvious, right. I don’t think that anybody looking at a project like this would not say, ‘Well listen, with all the gas curtailments going on, how can you be certain your project will get the gas it needs?’ Now, we have some assurance. We’ve seen the development plan for the upstream (supplies).” 

Warner said he also has “assurances from the National Gas Company of T&T (NGC) that the gas will be there. From what we see, the data is there to support it.”

Source:
Aleem Khan
Trinidad Guardian
Monday October 6, 2014

http://www.guardian.co.tt/business/2014-10-06/gas-concerns-investors-us850m-plant