ANSA McAL rolls out $1B profits despite downturn

He made the statement yesterday after announcing that the Group recorded $1.1 billion in profit before tax in 2016 for the fourth consecutive year and that its net assets grew by $605 million, an increase of 8.7 percent. Taxation was $304,177,000, yielding profit after tax of $803,108,000.

Sabga made the announcement as he met with stockbrokers to present the Group’s results for the 2016 year end at the ANSAMcAl flagship TATIL Building on Maraval Road, Port-of-Spain. He said the profit would have been higher if not for a few items which affected Group companies.

One was a fire which knocked out a furnace at Carib Glass Limited, causing a $38 million drop in profit; another was an increase in the rate of corporate tax which affected the Group’s deferred tax position causing another $38 million loss and there was a decline in the Group’s media business because of a drop in corporate spending and advertising. He said there has been a contraction in the marketplace and consumer spending has declined by $2.3 million but stressed that if it were not for these onetime reversals, the company’s profits would have been higher, adding that he does not expect to experience those situations again in the current year. He said the Group’s profit margin remains healthy at 18.5 percent and for the fourth year in a row, the company has decided to increase to $1.50 the dividend it will pay to shareholders, which means the Group will pay a total of $258.7 million in dividends.

Asked by stockbrokers about the Group’s outlook for the current year, Sabga said ANSA McAL continues to invest in 2017 and is spending more than $300 million in information technology systems over the next five years including at the ANSA Merchant Bank, at TATIL and TATIL Life. He said Standard Distributors is upgrading its retail business and within six months will open a 40,000 square foot megastore.

He said the company is looking at two acquisitions, one of which is close to being finalised. He said it is in the manufacturing sector and will give the Group greater reach in the manufacturing sector in the Caribbean and significantly strengthen one of its existing businesses.

He said although the economy has shrunk, ANSA McAL intends to carve out a larger piece of the pie for itself. “It’s not in our DNA to take our foot off the accelerator.” He said the Group has also invested in executive training and is seeing the results of that training.

“We are looking at acquisitions aggressively and we are looking at expanding our existing businesses.” Stockbrokers attending the session were generally pleased with the results.

Don Mullings of Bourse Securities was happy with the dividends being paid by the Group and said the results were “not bad” given that there was economic decline and foreign exchange shortage in the country.