Home' Trinidad and Tobago Guardian : May 17th 2015 Contents MAY 17 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
Despite strong growth in
many of its business
units, ANSA McAL Ltd
(AMCL) recorded mar-
ginally softer revenues
and slightly lower prof-
its in 2014. These
results were primarily
influenced by lower sales in Barbados and
more challenging results in its financial services
We will now review AMCL s performance
for the year ended December 31, 2014.
Changes in financial position
Total assets rose from $12.23 billion to $13.12
billion last December, reflecting an increase
of 7.25 per cent.
Long-term assets grew by 9.1 per cent to
$6.5 billion from the 2013 level of $5.96 billion.
The largest component, investment securities
measured at amortised costs, closed 2014 at
$1.92 billion; this reflected an increase of 36.5
per cent over the 2013 balance of $1.41 bil-
Here, all categories of investments increased:
government bonds rose to $494.6 million
(2013: $328.8 million) while state-owned com-
pany securities ended at $802.2 million (2013:
$653 million) and corporate bonds moved from
$427.4 million to $626.4 million.
Also, investments classified as current assets,
increased to $1.61 billion from $1.2 billion, or
by 33.6 per cent. The largest advance was
noted in the value of equities, which jumped
by more than 68 per cent to $1.01 billion from
$600 million as at year-end 2013.
Total loans and advances increased mar-
ginally to $2.13 billion from $1.97 billion. The
long-term portion advanced from $1.36 billion
to $1.43 billion while the current portion rose
to $701.9 million from the 2013 level of $608.7
These loans and advances are classified as
personal, commercial and professional & other.
Only the commercial sector exhibited a decline,
moving down from $604.5 million to last year s
$416.2 million. The professional and other
sector rose by 35.4 per cent to $965 million
from the 2013 level of $712.8 million. Loans
to the personal sector advanced by 16 per cent
to $752.6 million from $649 million.
Plant, property and equipment declined
marginally to $1.65 billion from $1.71 billion.
This contraction was mainly due to the current
year s depreciation charges of $198.6 million
exceeding additions of $184.3 million.
Total liabilities increased by less than 7 per
cent to $6.66 billion from the previous level
of $6.25 billion.
Total customers deposits and other funding
instruments increased to $2.83 billion from
$2.71 billion or by 4.4 per cent.
Here, the only category that exhibited an
increase was deposits from private companies,
estates and financial institutions; these balances
moved from $872.7 million to last year s $1.07
billion. Deposits sourced from individuals fell
to $1.05 billion from $1.11 billion. Funds
acquired from pensions, credit unions and
trustees declined to $709.4 million from the
previous level of $722.9 million.
Deposits due within one year rose to $2.55
billion from $2.39 billion. On the other hand,
deposits maturing beyond one year fell to
$275.6 million from $314.8 million.
Total equity advanced to $6.45 billion from
the previous level of $5.98 billion. Of this total,
shareholders equity increased to $5.77 billion
from the previous year s $5.29 billion.
The largest component, retained earnings,
climbed to $5.17 billion from $4.73 billion. The
most significant movements saw profit for
2014 of $685.9 million boost retained earnings
while dividends to stockholders of $224 million
reduced the brought forward figure.
With 176,192,841 shares outstanding, each
share has a book value of $32.75 (2013: $30.05).
Income and profits
Total gross revenue declined marginally to
$7.16 billion from $7.24 billion in 2013. Despite
this fall, inter-segment revenues increased to
$1.05 billion from $1.02 billion.
The increases in inter-segment sales were
most pronounced under the "media, services
and parent company" and "manufacturing,
packaging and brewing" segments.
Third party revenues also fell to $6.1 billion
from the previous year s $6.22 billion.
Cost of sales consumed $3.79 billion
(2013:$3.80 billion) leaving a gross profit of
$2.32 billion (2013: $2.42 billion). This figure
was enhanced by other income of $258.6 mil-
lion (2013: $221.9 million). The other income
line was boosted by miscellaneous income,
which rose from $26.5 million in 2013 to $82.3
Staff costs and administrative and distri-
bution costs, the two largest items, also
increased. The former rose to $580.5 million
from $558.5 million while the latter moved
from $626.5 million to last year s $635.5 mil-
These changes, along with several smaller
ones, allowed AMCL to deliver an operating
profit of $1.08 billion versus $1.16 billion for
Finance costs declined to $40.6 million from
$47.4 million in 2013. The largest decrease
was noted under interest on overdrafts and
other finance costs, which fell to $5.3 million
from $10.1 million.
The share of result from associates and joint
ventures came in at $26.1 million (2013: $27.2
million). This item mainly represents the com-
pany s share of its 40 per cent ownership in
Trinidad Lands Ltd and various percentages
in ANSA McAL (Barbados) Group.
Pre-tax profit registered at $1.07 billion
Taxation of $263.5 million was $6 million
lower than the previous year and resulted in
an after- tax profit of $802 million (2013:
After excluding non-controlling interests,
the profit attributable to shareholders came
in at $684.9 million (2013: $742 million).
These results translated into 2014 EPS of
$3.97 versus $4.31 for 2013.
The largest segment, automotive, trading
and distribution delivered a four per cent
increase in revenues and contributed almost
$71 million more in pre-tax profit. This strong
result was largely driven by higher automobile
The manufacturing, packaging and brewing
segment delivered marginally lower revenues
while its pre-tax profit contribution slid by
almost $19 million. An impairment charge of
$7.5 million helped restrain this unit s profit
The insurance and financial services segment
endured a $97 million reduction in pre-tax
profit contribution. One of the major factors
that influenced this lower result was the unre-
alised losses at its merchant bank subsidiary,
which pulled down its investment income.
The relevant line item moved from a positive
$67.2 million in 2013 to a negative $29.7 million
The media, services and parent company
unit is an interesting combination of entities.
It is noteworthy that almost 53 per cent of its
revenues (2013: 47.3 per cent) related to other
group companies. In addition to typical head
office services, there is a high level of adver-
tising revenues that are sourced from other
External revenues from this segment fell by
almost $127 million while pre-tax profits con-
tracted by $34 million. Partly explaining this
decline was the $14.3 million profit reduction
at Guardian Media Ltd, in which AMCL owns
a 56.17 per cent stake.
In 2014, Trinidad & Tobago accounted for
$4.63 billion or 75.9 per cent of external rev-
enues while Barbados contributed $990 million
or 16.2 per cent and other territories $485
million or 7.9 per cent. Only local sales exhib-
ited an improvement over 2013; the most
notable decline was in Barbados revenues,
which were $1.15 billion in 2013.
Dividends and share price
Dividends paid with respect to both 2013
and 2014 were unchanged at $1.30.
The share price opened on January 2, 2014
at $66.50 and closed on December 31, 2014
at $66.40. The share recently closed at $67.02.
At that price, the dividend yield is 1.94 per
cent. That share price also reflects a P/E mul-
tiple of 16.9 times. Historically, this multiple
was as high as 19.25 as at December 2012 and
as low as 13.90 as at December 2010.
This share is not as actively traded as it
might be. Part of the reason is that the ten
largest shareholders, mostly institutions, own
132,206,345 stock units, corresponding to 75
per cent of the total issued shares.
Especially since after 2006, there has been
no evidence of a sustained growth in EPS;
perhaps, this might change in the current and
Many of the group s subsidiaries are expected
to benefit from developments in the local
economy during the course of 2015.
Either in the second or third quarter, the
media segment should benefit hugely for the
general elections campaign, which is expected
to extend for at least four weeks. Related to
this activity, the brewery company should also
benefit from this electioneering activity.
Recently, we have seen Standard Distributors
offer a 10 per cent discount to new HDC
homeowners. Supporting this initiative, its
building-related companies (air conditioners,
paint and blocks) should also improve their
sales as new homeowners usually spend gen-
erously to personalise their newly acquired
Despite current economic challenges, auto
sales show no immediate signs of screeching
to a halt.
The group s subsidiaries in the financial
sector should deliver improved results as at
least one acquisition is nearing full consum-
In next week s article, I develop this point
further when I explore more fully the results of
ANSA Merchant Bank Ltd.
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