May 2015 Financial News

T&T investment ready

May 14, 2015

Sagicor Group chief executive officer and president Dodridge Miller remains optimistic that despite falling oil prices, Trinidad and Tobago remains a country to invest in.

“Trinidad’s economy grew, albeit by a small amount in 2014. There has been no issues we’ve seen so far which would cause us to be concerned,” he said.

He was speaking last month during a joint video conference at Sagicor’s office in Port of Spain, involving Barbados and local media.

At the media conference, Miller pointed out that Trinidad and Tobago was one of three countries to be shortlisted for the Group’s new headquarters.

The other two countries are the United Kingdom and Bermuda.

Among the factors that will contribute to Sagicor’s decision, he said, is the ease of doing business in the particular country.

“We expect that by the middle of May that analysis will be completed and a recommendation made to our board, thereafter the board will have to present it to shareholders in a special meeting.

We estimate that this could be completed by the first quarter of 2016,” Miller said.

Earlier this year, Sagicor Group announced it would be relocating its headquarters after the company was downgraded by Standard and Poor’s on December 30 last year, from a BB+ to a BB-.

Miller said last week he does not see Barbados’ economic rating returning to investment grade in the short term.

He believes that with Sagicor’s operating performance and re-domiciling to a country with A rating, the company’s rating could return to an investment grade of BBB.

He noted that Sagicor had a solid performance in 2014, recording net income of BDS$256.7 million, compared to BDS$230.6 million for 2013.

“On an overall basis we expect to see the improvements we’ve seen in 2014 to continue in 2015. We’re confident of our furture,” Miller said

On June 27, 2014 Sagicor Group completed acquisition of RBC Jamaica.

Miller said this acquisition has made Sagicor Jamaica a very strong and dominant institution.

“It was a strong institution before, it is even stronger now,” he said.

“We have moved our banking presence from number eight in the market to number three. It provides a stronger commercial banking base, allowing us to rely less on the repo of government debt business which was the core business of the earlier bank that we had owned,” he added.

He noted that he expects the bank to be profitable.

“For the first three months of 2015 it has produced profits of US$2.2 million, all normal profit.”

As to whether the Group had any plans of taking Sagicor Bank beyond Jamaica Miller said:

“There was an opportunity that existed in Jamaica and we think it’s strategic to the growth and development of Jamaica. We have not looked to extend that beyond Jamaica at this point.”

Miller noted that the Sagicor is at two minds about continuing its sugarcane and agriculture operations in Barbados seven years after it purchased Barbados Farms Limited (BFL). Sagicor Group bought BFL in 2008 for BDS$79.3 million but Miller said since then it has been a downhill battle.

He said in the last two years alone the company has lost BDS$4 million and each year before that it lost between BDS$.3 million to BDS$.5 million.

“When we bought it in 2008 we had forecast that it would make about $2 million a year in losses for about five years until it was restructures. We forecast that after year five we would be able to recoup some of that cost through the sale of land,” he said.

“That was the plan when it was acquired in early 2008 but the world has changed and the economy has gone south and we cannot rely on land sale to recover losses in agriculture. We cannot continue to make $2 million a year in agriculture. We cannot continue to do that to our shareholders and so we have to take a strategic decision as to whether we exit agriculture or whether we continue to try to restructure internally because we’ve done a lot of work internally,” the Sagicor president added.

Miller noted that there remains uncertainty as to the future of sugar in Barbados but before the Group will make a decision on that.

 

Source:
By Leah Sorias
Trinidad Express
Thursday May 14, 2015

http://www.trinidadexpress.com/article/20150513/BUSINESS/150519867