Home' Trinidad and Tobago Guardian : August 11th 2016 Contents BG14 STOCKS
BUSINESS GUARDIAN www.guardian.co.tt AUGUST 11 • 2016
As part of its response to more
difficult economic times, the
Suriname government deval-
ued its currency from
SR$3.35 to SR$4.20 to
US$1.00. The average
exchange rate for 2015 was SR$3.48 to US$1.00.
More recently, in early August 2016, the
exchange rate fell to SR$7.04 to US$1.00 while
annual inflation hit 55 per cent in May 2016.
One of that country s largest multi-sector
groups is United Suriname Holdings Ltd, to
which we will refer by its Dutch initials, VSH
or VSH Group. Its principal associate is the
insurance company Assuria NV in which it
owns 24.63 per cent and, including the chair,
holds two out of its six directors on that board.
We will now review VSH s performance for
the fiscal year ended December 2015.
Changes in financial position
Total assets rose to SR$250.8 million from
SR$229.4 million. Long-term assets were little
changed, moving from SR$159.6 million to
SR$159.4 million, however, there were signif-
icant movements within several line items.
Investment in its associate fell to SR$73.4
million from SR$84.8 million. Although Assuria
continues to be profitable, this decline reflected
a one-off adjustment of SR$19.3 million relating
to a revaluation reserve; this adjustment was
required consequent upon the enactment of
new insurance legislation in late 2015.
In addition, subsidiaries interests increased
from zero to SR$2.02 million; this reflected
the purchase of shares in subsidiaries of Con-
solidated Industries Corporation (CIC) of
SR$1.82 million and shares in VSH Foods
Its holdings in publicly traded companies
are classified as financial assets, which rose to
SR$18.05 million from SR$16.76 million. The
main reason for this increase was the appre-
ciation in the price of its 163,202 shares in
Torarica Holdings (hotels), which rose from
SR$72.00 to SR$80.00; the value of this holding
ended at SR$13.04 million from SR$11.74 mil-
In addition, its 1,287 shares in the brewery,
Surinaamsche Brouwerij, rose to SR$2,680
from SR$2,650 each; consequently, its year-
end value improved to SR$3.45 million from
Property, plant and equipment rose to
SR$64.9 million from SR$57.3 million. Net
additions, mainly under machinery and equip-
ment of SR$14.1 million, were reduced by
depreciation of SR$6.6 million.
Intangible assets comprised software, which
net value increased to SR$1.08 million from
Current assets climbed to SR$91.4 million
from SR$69.8 million. Inventory values rose
to SR$29.04 million from SR$25.00 million.
This mainly reflected higher investments in
raw materials and packaging (2015: SR$14.9
million; 2014: SR$11.9 million) and goods held
for sale (2015: SR$6.3 million; 2014: SR$4.9
Trade and other receivables advanced to
SR$37.9 million from SR$28.4 million. The
largest component, trade receivables, rose
from SR$21.7 million to SR$30.7 million. Taxes
recoverable increased from nil to SR$266,000.
Cash and cash equivalents rose by 47.5 per
cent to SR$24.2 million from SR$16.4 million.
Its largest holdings were denominated in US
dollars, equivalent to SR$15.9 million (2014:
Local currency holdings increased marginally
from SR$6.8 million to SR$7.1 million. Balances
denominated in Euros fell from SR$1.67 million
to SR$1.14 million.
Total liabilities rose by 49 per cent to
SR$71.6 million from SR$48.1 million.
Total debt climbed by 304 per cent SR$13.36
million from SR$4.08 million. Long-term
borrowings advanced from SR$1.92 million
to SR$11.63 million while current debt closed
at SR$4.73 million from SR$2.16 million.
Long-term debt relating to CIC fell to
SR$1.80 million from SR$1.92 million. In 2015,
a new seven-year debt of US$3 million was
incurred by its subsidiary, VSH Transport,
which had a year-end value of SR$9.83 mil-
The increase in current debt mostly related
to a new overdraft facility at CIC for
US$400,000, which was issued a fixed rate
of 8.25 per cent.
Total provisions declined to SR$4.63 million
from SR$5.34 million. Although the long-
term portion fell to SR$2.96 million from
SR$4.46 million the current portion increased
to SR$1.67 million from SR$0.88 million.
The increase in the short-term provision
reflected a higher allocation to redundancies,
from SR$121,000 to SR$917,000. This would
affect its subsidiaries VSH Shipping, VSH
Transport, VSH Steel and CIC.
On the other hand, the 2014 higher long-
term provision reflected its intention to
increase pension benefits at CIC by SR$1.19
million. That figure declined to zero in 2015.
Trade and other payables rose to SR$38
million from SR$25.7 million. The largest
increase was shown under trade payables,
which advanced to SR$26.3 million from
Total taxes due fell from SR$12.96 million
to SR$12.61 million. The current portion
declined to zero from SR$801,000 while
deferred taxes increased to SR$12.6 million
from SR$12.2 million.
Total equity fell from SR$181.3 million to
SR$179.1 million, of which SR$15.8 million
related to minority interests. Issued capital
and capital in excess of par were unchanged
at SR$19.86 million and SR$240.4 million
Retained earnings improved from SR$90.55
million to SR$107.8 million. The major move-
ments were the current period s profit of
SR$18.55 million reduced by SR$1.19 million
in interim dividends.
On the other hand, the revaluation reserves
fell to SR$55.2 million from SR$72.9 million;
this reduction reflects the difference between
the commercial depreciation and fiscal depre-
ciation of its long-term assets.
With 1,986,338 shares outstanding, each
share had a book value of SR$82.22 (December
Income and profits
Total revenues grew by 14.6 per cent to
SR$78.1 million from SR$68.1 million. The
shipping component saw strong revenue
growth of 50 per cent, moving from SR$20.8
million to SR$31.2 million. In the industrial
segment, revenues rose by 4.4 per cent to
SR$38.8 million from SR$37.2 million.
Trading and real estate exhibited small
declines; the former closing at SR$5.3 million
from SR$5.8 million while the latter ended at
SR$1.4 million from SR$1.5 million.
The other segment contracted by half to
SR$1.4 million from SR$2.8 million. Terminal
and agency services income declined from
SR$1.17 million to SR$604,000 while "other
income" shrunk to SR$611,000 from SR$1.23
Total costs rose by 21.7 per cent to SR$64
million from SR$55.6 million. Based mostly
on performance evaluations, personnel expens-
es increased by 23 per cent, moving from
SR$25.5 million to SR$31.4 million. The largest
component, salaries and wages, climbed by
25.3 per cent to SR$21.3 million from SR$17
million. In addition, contributions to pension
plans rose from SR1.2 million to SR$1.6 mil-
Exhibiting a similar increase, administrative
expenses rose to SR$24.7 million from SR$20.1
Consistent with its higher debt load, interest
expenses increased from SR$394,000 to
SR$905,000. Similarly, its larger investments
in machinery and equipment pushed up
depreciation and amortisation charges to
SR$6.82 million from SR$6.29 million.
Total provisions fell to SR$159,000 from
SR$218,000. Despite an increase in provisions
for redundancy, reductions were recorded in
both pension and medical components.
These changes saw profit from continuing
operations register at SR$14.1 million from
2014 s SR$15.6 million.
The share of profit from its associate,
Assuria, declined marginally to SR$10.8 million
from SR$11.3 million. However, income from
investments rose to SR$9966000 from
SR$918,7000, which reflected higher income,
in particular, from its 12.3 per cent stake in
Torarica Holdings NV.
These movements saw pre-tax profit decline
to SR$25.9 million from SR$27.8 million. After
allowing for taxes of SR$5.7 million and non-
controlling interests of SR$1.6 million, the
net profit attributable to shareholders came
in at SR$18.56 million (2014: SR$20.15 million).
These results translated into 2015 diluted EPS
of SR$9.34 compared with SR$10.15 for 2014.
The increase in shipping income resulted
from higher break bulk/project cargo ship-
ments to 102.8 metric tonnes from 66.8 metric
tons in 2014, roll on-roll off cargos and con-
tainer handling as well as ancillary services
to airlines and ships.
In anticipation of a slow-down in local
economic activity, an office was established
in Guyana last November, which forms part
of its current 5-year expansion plan.
The industrial segment includes production
of foods (VSH Foods), detergents and plastic
packaging (CIC) and steel products (VSH
Steel). At VSH Foods (56.01 per cent owned)
sales, at SR$20.8 million, were marginally
lower, however, the operating result was slight-
ly higher at SR$3.47 million.
At 59.44 per cent owned CIC, income rose
by almost five per cent to SR$24.2 million
but operating result fell to SR$2.5 million from
SR$4.2 million. Exports grew by nearly six
per cent and are projected to increase in the
current difficult local situation.
Difficult construction conditions pulled
down sales at VSH Steel from SR$5.2 million
to SR$4 million while the loss worsened to
SR$1.1 million from SR$0.4 million. Plans are
afoot to expand into both Guyana and Panama
to help cover overheads and return to prof-
it.The trading division suffered from lower
margins and higher personnel and marketing
costs; this pulled down profits to SR$746,000
from SR$2.2 million.
Real estate income registered a small decline.
In addition, profit contribution fell to
SR$701,000 from SR$955,000. The develop-
ment of a new office building is in the last
stages of being designed.
The share price advanced from the year-
end 2014 figure of SR$50.50 and closed 2015
at SR$72.00. At the end of July 2016, the
price was unchanged at SR$72.00. After paying
four quarterly dividends of SR$0.15, a final
dividend of SR$1.10 was paid in May 2016
bring the total for 2015 up to SR$1.70. This
dividend gives investors a yield of 2.36 per
The regular quarterly dividend is being
maintained in 2016 at SR$0.15.
The VSH new 2016 to 2021 plan speaks of
its ambition to achieve regional dominance
through "professionalizing our support serv-
ices , "innovation in our business model" and
"aggressive regional penetration". The latter
is expected to see the start of a concerted
expansion drive throughout the Caribbean
chain of islands and possibly beyond...
Next week, we will review GraceKennedy's
United Suriname Holdings' 2015 results
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