Home' Trinidad and Tobago Guardian : September 27th 2015 Contents SEPTEMBER 27 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG11
The United Suriname Holding
Company, referred to by its
Dutch initials VSH in this analy-
sis, was established in 1958 and
currently operates through nine
subsidiaries and three associates
that are involved in the shipping, trading, real
estate, manufacturing, financial services and
We start by reviewing its operations for the
year ended December 2014.
Changes in Financial Position
Total assets rose by 9.7 per cent, moving from
Sr$209 million as at the end of 2013 to Sr$229.4
million last December. This is equivalent to about
The largest component was its investment in
its associate, which represents its 24.63 per cent
ownership in Assuria; this sum advanced from
Sr$71.2 million to Sr$84.8 million. The company s
share of profit was Sr$11.31 million, which was
reduced by a profit distribution of Sr$3.68 million
and boosted by an adjustment to the revaluation
reserve of Sr$5.95 million.
The value of plant, property and equipment
closed at Sr$57.3 million from Sr$55.1 million.
New purchases of Sr$19.7 million were offset
by depreciation charges of Sr$6.1 million and
further reduced by disposals of Sr$0.6 million
and transfers of Sr$10.8 million.
Intangible assets rose from Sr$571k to Sr$810k.
New investments added Sr$39k while amorti-
zation charges consumed Sr$152k.
Financial assets rose from Sr$15 million to
Sr$16.76 million. The largest component was
its investment of 163,020 shares in N.V. Hotel-
maatschappij Torarica, which was valued at
Sr$11.73 million for both periods.
On the other hand, its investment in Suri-
naamse Brouwerij N.V. rose from Sr$1.99 million
to Sr$3.41 million. The third largest investment
was in Self Reliance N.V., which value climbed
to Sr$830k from Sr$494k.
Despite the rise in revenues, the value of
inventories was stable, at Sr$25 million, for both
Trade and other receivables rose to Sr$28.4
million from Sr$26.1 million. The largest com-
ponent, trade receivables, increased to Sr$21.7
million from Sr$19.3 million as at December
Cash and its equivalents rose to Sr$16.4 million
from Sr$15.98 million. These balances are
denominated in three currencies. The largest
portion of Sr$7.9 million is denominated in US
dollars while Sr$6.8 million is in local currency
and the remainder of Sr$1.7 million is denom-
inated in Euros.
VSH s major long-term liability is deferred
tax of Sr$12.15 million. Its short-term trade and
other payables of Sr$25.75 million was slightly
greater than the 2013 balance of Sr$25.1 mil-
Total borrowings stood at a modest Sr$4.1
million. The long-term portion was Sr$1.9 million
while the current portion was Sr$2.2 million.
Most of this debt relates to its subsidiaries, VSH
Foods and Consolidated Industries Corporation
(CIC), in which it holds a 56.01 per cent and
59.44 per cent stake respectively.
Total provisions and commitments fell from
Sr$5.99 million to Sr$5.34 million last December.
These relate mostly to medical and pension obli-
gations, deferred maintenance, redundancy,
product warranty and disposal of waste. At as
the end of 2014, the current portion was
Sr$880.5k while the long-term portion was
Total equity advanced to Sr$181.3 million from
the 2013 year-end balance of Sr$162.2 million.
Both issued capital and capital in excess of
par value remained steady at Sr$19.863k and
Retained earnings rose to Sr$93 million from
Sr$75.7 million. This mostly reflects after-tax
profit of Sr$20.15 million reduced by dividends
of Sr$2.98 million. Meanwhile, revaluation
reserves increased to Sr$72.9 million from Sr$69.2
After allowing for non-controlling interests
of Sr$15.1 million, shareholders equity improved
to Sr$166.2 million from Sr$145.3 million.
With 1,986,338 shares outstanding, each share
has an intrinsic value of Sr$83.67 (December
Income and Profits
Total revenues advanced by 5.4 per cent to
reach Sr$68.1 million from the comparative 2013
result of Sr$64.6 million.The shipping division
produced revenues of Sr$20.8 million, which
was 21.2 per cent greater than the Sr$17.2 million
delivered in 2013. The largest segment, industry,
delivered revenues of Sr$37.16 million; that result
was Sr$2.68 million or 6.7 per cent lower than
the 2013 figure of Sr$39.84 million.
Total costs of Sr$52.56 million was 4.7 per
cent greater than the Sr$50.21 million incurred
in 2013. Here, the most notable change was per-
sonnel expenses, which climbed by 12.2 per cent
or Sr$2.77 million to Sr$25.54 million from the
previous year s Sr$22.77 million.
On the other hand, the most notable decline
was shown in the "provisions" line; this line
item contracted to Sr$217.9k from the previous
level of Sr$1.6 million. Some of the most promi-
nent changes were: uncollectable receivables
(2014: Sr$669k; 2013: Sr$1.39 million); pension
(2014: minus Sr$503k; 2013: zero); redundancy
(2014: Sr$72.4k; 2013: Sr$154.5k).
These changes saw profit from continuing
operations register at Sr$15.57 million. This result
represented an improvement of Sr$1.17 million
or 8.1 per cent over the 2013 result of Sr$14.4
The share of profit from its stake in Assuria
climbed by 17.7 per cent to Sr$11.31 million from
Sr$9.61 million. Assuria s ownership of a 44 per
cent stake in De Surinaamsche Bank N.V. (Suri-
name s largest bank) also indirectly benefits VSH.
In addition, its profit on investments rose to
Sr$918.7k from Sr$740.1k. Mainly, this repre-
sented the improved results from its 12.3 per
cent stake in Hotel Torarica, which operates
These changes saw pre-tax profit register at
Sr$27.8 million, which was 12.3 per cent greater
than the Sr$24.75 million earned for 2013.
At the after-tax level, profit came in at Sr$22.2
million versus Sr$19.6 million for 2013.
After allowing for minority interests, the profit
attributable to shareholders came in at Sr$20.15
million; this was 14 per cent greater than the
Sr$17.68 million recorded in 2013.
These results translated into 2014 EPS of
Sr$10.15 compared with Sr$8.90 for 2013.
The strong showing for the shipping segment
was driven by increases in both break bulk/project
cargo shipments (up by 4.3 per cent in terms
of tonnage) and cargo handlings (2.8 per cent
greater twenty foot equivalent units (TEUS).
Also, the number of vessels handled rose to 258
Despite these positives, operating profit fell
by 4.3 per cent to Sr$7.8 million; in 2013, the
figure was Sr$8.2 million. This decline was attrib-
uted to three factors: higher personnel costs,
expenses related to software development and
The steel company produces prefabricated
steel structures and supplies the construction
industry in Suriname and the Caribbean. Oper-
ating income fell to Sr$5.2 million from Sr$7.7
million. Weakened market conditions, especially
in the second half of the year, saw this company
produce a loss of Sr$395k versus a 2013 profit
of Sr$1.52 million.
These results are combined with the detergents
and food business, which all form the "industry"
segment shown above. Compensating for the
loss at the steel business, both the food and
detergents companies registered improved per-
VSH Foods produces and distributes mar-
garine, butter and shortening. Sales increased
by less than 10 per cent, while favourable com-
modity prices helped profits, which surged by
76 per cent to reach Sr$3.37 million from 2013 s
Consolidated Industries Corporation (CIC)
manufactures industrial and household detergents
and plastic packaging materials. Income declined
by less than 1 per cent to Sr$23.1 million. Nev-
ertheless, profit improved by 7.7 per cent to
Sr$4.23 million from Sr$3.93 million.
The other revenue segment combines several
miscellaneous items. For example, income from
terminal and agency services generated Sr$1.17
million (2013: Sr$845k) and income from previous
years contributed Sr$363k (2013: Sr$345k).
Historical performance, Dividends and Share
Over the past five years, VHS has exhibited
reasonable growth in many areas. For example,
starting from 2010 revenues of Sr$48.8 million,
this metric grew by 39.5 per cent over this period
to reach Sr$68.1 million last year.
Profit from continuing operations grew at a
less robust pace, expanding by only 28 per cent
from Sr$12.16 million in 2010 to 2014 s Sr$15.57
However, an increasingly significant factor in
VSH s performance has been its ownership of
24.63 per cent of Assuria N.V. This measure,
grouped under other income, jumped from Sr$5.1
million in 2010 to Sr$12.23 million in 2014; this
translates into growth of 139.8 per cent! The
bulk of this figure relates to Assuria.
During calendar 2014, VSH paid four quarterly
dividends of Sr$0.10 each. Based on the 2014
results, a final dividend of Sr$1.25 was also paid,
thus bringing the total dividend for 2014 up to
In 2015, the quarterly dividend has been
increased to Sr$0.15. These are payable in June,
August and November 2015 and February 2016.
As at December 2014, the share price closed
at Sr$50.50; this reflects a modest improvement
over the December 2013 price of Sr$46.00. Based
on a dividend of Sr$1.65 and a share price of
Sr$50.50, the yield is 3.27 per cent. On September
17, 2015, the share price had advanced to
Sr$70.00; this suggests that its half-year results,
likely to be released this month, have been or
were expected to be better than expected.
Even at this higher share price, VSH s shares
were still priced below its book value of Sr$83.67.
Suriname holding company
trading below book value
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