Home' Trinidad and Tobago Guardian : May 25th 2017 Contents MAY 25 • 2017 guardian.co.tt BUSINESS GUARDIAN
STOCKS | BG17
AMCL expands to the USA
During 2016, the ANSA McAL
Group (AMCL) made two
niche acquisitions in the beer
and chemicals parts of its
Today, we will review AM-
CL's results to December 31, 2016.
Changes in financial position
Total assets grew from $13.3 billion to $13.9
billion or by 4.6 per cent.
Property, plant and equipment rose to $1.96
billion from $1.79 billion. Additions for the year
contributed $279 million while acquisitions,
mainly Indian River Beverage Corporation,
an American malt and cider producer and
Easi Industrial Supplies Ltd, a local trader in
caustic soda, added $121 million. Depreciation
and disposals and write downs reduced the
Total investment securities advanced to
$3.51 billion from $3.42 billion. Investments
measured at fair value through income state-
ment fell to $931.5 million from $1.24 billion.
In contrast, those measured at amortised cost
rose to $2.58 billion from $2.18 billion. Most of
these relate to the AMCL subsidiary.
Loans, advances and reinsurance assets in-
creased marginally to $2.53 billion from $2.5
billion; these assets related primarily to its
financial services businesses, including AMCL.
Intangible assets climbed to $329.7 million
from $207.6 million. Most of the increase re-
flected the goodwill arising from its two ac-
quisitions; Indian River contributed $58.04
million while Easi Industrial accounted for
Inventories increased to $1.35 billion from
$1.28 billion. The largest movement was shown
under finished goods and returnable contain-
ers, which rose to $984.7 million from $905.7
Trade and other receivables fell to $906.9
million from $1.08 billion. The other receiv-
ables component contracted to $114.3 million
from $335.2 million. The major increase was
net trade receivables, which closed at $582.2
million from $530.8 million.
Cash and short-term deposits improved to
$1.92 billion from $1.76 billion. The cash and
bank balances component fell to $841.7 million
from $1.12 billion while short-term deposits
almost doubled to $950.5 million from $490.1
Total liabilities edged up to $6.285 billion
from $6.278 billion.
Customers' deposits and other funding in-
struments, which are primarily located under
AMCL, declined to $2.26 billion from $2.36
Total borrowings dropped to $849.1 million
from $977.7 million. The current portion fell to
$377,000 from $130.3 million while the long-
term element rose marginally to $848.7 million
from $847.4 million.
Insurance contract liabilities increased to
$1.36 billion from $1.32 billion. The current
portion declined to $381.3 million from $389.2
million while the sums exceeding one year grew
to $980 million from $935 million.
Trade and other payables advanced to $1.04
billion from $971.4 million. Both accruals and
trade payables increased; the former closed
at $243.4 million from $197.8 million while
the latter ended at $441.7 million from $353.9
million. The increase in the latter could be at-
tributed to the difficulty in accessing foreign
exchange to settle foreign payables.
Total equity improved to $7.58 billion from
$6.97 billion. Excluding non-controlling in-
terests of $807.6 million, shareholders' equity
closed at $6.78 billion from $6.24 billion.
Retained earnings climbed to $6.29 bil-
lion from $5.77 billion. The opening balance
was boosted by the current period's profit of
$691.3 million, a transfer of $65 million and
other comprehensive income of $7.5 million.
Dividends to shareholders of $241.2 million
lowered the closing figure.
Other reserves increased from $315.8 million
to $322.9 million; this component benefitted
from exchange differences on translation of
foreign operations of $26.6 million but trans-
fers of $19.5 million restrained the increase.
Stated capital rose marginally from $175.3
million to $175.32 million, which reflected the
value of the equity based compensation.
The weighted average number of shares
outstanding increased to 172,381,000 from
172,268,000; consequently, the book value of
each share improved to $39.32 from December
Income and profit
Total revenue fell by 3.5 per cent to $6.0
billion from $6.21 billion. Both the sale of
goods and the rendering of services exhibit-
ed declines; the former closed at $5.07 billion
from $5.24 billion while the latter registered at
$929 million from $976 million. Both Barbados
and T&T exhibited lower revenues while other
territories recorded a ten per cent increase.
The cost of sales came in at $3.7 billion from
$3.79 billion; consequently, gross profit closed
at $2.30 billion from $2.42 billion. Other op-
erating costs, mainly staff, administrative and
distribution expenses increased from $1.52
billion to $1.58 billion. This resulted in core
operating profit declining to $723 million from
However, other income expanded by 43.2
per cent to $392.8 million from $274.4 mil-
lion. Mainly, this reflected improvements
under three categories. Interest and invest-
ment income climbed to $127.7 million from
$116.5 million while net foreign exchange gains
swelled to $99.5 million from $32.4 million.
Finally, miscellaneous income expanded to
$96.3 million from $59.1 million.
These movements saw operating profit reg-
ister at $1.11 billion from 2015's $1.18 billion.
In line with lower debt, finance charges
declined to $41.5 million from $43.6 million.
The share of results from associates and
joint venture improved to $32.9 million from
This mainly reflects its 40 per cent in Trin-
idad Lands Ltd and various interests held by
ANSA McAL Barbados.
These changes resulted in a pre-tax profit
of $1.107 billion, which was marginally lower
than $1.163 billion recorded for 2015. Influ-
enced by the increased local marginal tax rate
to 30 per cent, the effective tax rate climbed to
27.5 per cent from 23.3 per cent; consequently,
the tax amount rose to $304.2 million from
The net profit registered at $803.1 million
versus $891.1 million. After allocating sums
due to non- controlling interest, the profit at-
tributable to shareholders was $691.3 million;
that result was $75.3 million or 9.8 per cent
lower that 2015's $766.6 million.
This result translated to EPS of $4.01 com-
pared with the previous year's $4.45.
At the manufacturing, packaging and brew-
ing division sales fell marginally while pre-tax
profits declined by $50.3 million or 10 per cent.
A fire at Carib Glassworks Ltd caused a furnace
shut down resulting in a $38 million profit loss.
The slow-down in the local construc-
tion sector impacted its building blocks and
paint businesses, however, increased exports
and some regional expansion helped shore up
The automotive, trading and distribution
businesses delivered $101.5 million less reve-
nues while pre- tax profit contracted by $62.5
million or 24.5 per cent. Despite the overall de-
cline in the local automotive market, its high-
end brands reported some notable successes.
Its Barbados automobile distributorships de-
livered improved results, while the addition of
a Europcar franchise in Trinidad should help
stabilise future earnings.
The trading and distribution sub-sector op-
erates in Guyana, Barbados and T&T. The total
effect of several initiatives produced higher
top-and bottom-line results.
The insurance and financial services sec-
tor reported 5.3 per cent higher revenues and
delivered 17.7 per cent greater pre-tax profit.
This sector primarily relates to compa-
nies grouped under ANSA Merchant Bank
Ltd (AMBL). Having acquired Consolidated
Finance Company Ltd in October 2016, the
process of streamlining and integrating those
operations is expected to yield significant sav-
At the media, retail, services and parent
segment revenues contracted by $149 million
while pre-tax profit slipped by $2.6 million.
The revenue decline was very prominent at
Guardian Media Ltd, which experienced a 21.7
per cent fall in total revenues accompanied by
a 67 per cent contraction in pre-tax profit.
Interestingly, the multi-media segment ex-
perienced a larger revenue decline than the
print division. This subsidiary is in the process
of a significant transformation exercise.
While the sale of Trimart supermarkets
in Barbados also contributed to the revenue
decline, the gain on that transaction helped
shore up profits.
Alstons Shipping, Brydens Retail and
Brydens Xpress delivered commendable re-
sults. In contrast, ANSA Technologies was af-
fected by the lower energy prices while MBM
is undergoing a rationalisation process.
Geographically, the group is anchored in
T&T, which generated 76 per cent of its rev-
enue while Barbados accounted for 15 per cent.
Other major markets are Guyana (four per cent)
while other territories account for five per cent
of the total.
Q1 2017 results
For the first quarter ended March 31, 2017,
AMCL recorded a one per cent fall in revenues
to $1.396 billion from $1.41 billion.
Although operating profit and pre-tax profit
exhibited growth, the full effects of the new
local tax rate of 30 per cent pulled down net
profit to $155.1 million (Q1 2016: $156.2 mil-
lion). At the shareholder level, profits fell to
$133.5 million from $137.7 million. This result
reduced EPS to $0.78 from $0.80.
Divisionally, manufacturing, packaging and
brewing and insurance and financial serves de-
livered strong improvements while automotive,
trading and distribution and media and retail
recorded lower earnings.
Share price and dividends
AMCL's share price closed at $66.63 on De-
cember 31, 2015. For most of 2016 the share
traded in the range of $62.00 to $65.00; on
November 24, 2016, it closed at $61.93 but then
ended 2016 at $66.50, reflecting a minimal
In 2017, the share price continued to exhibit
stability and, after touching $67.50, recently
closed at $66.50.
Total dividends increased from $1.40 for 2015
to $1.50 for 2016. The final dividend of $1.20
will be paid on June 8, 2017. Relating the total
2016 dividend of $1.50 to the recent price of
$66.50, the yield is 2.26 per cent. That price
also reflects a P/E multiple of 16.6 and price
to book value of 1.69.
On May 3, 2017, the group lost its founder
and main shareholder, Dr Anthony N Sabga
ORTT. His successors best tribute to his mem-
ory would be to continue to build a stronger,
more diversified and resilient entity.
In next week's article, we will review Point
Lisas Industrial Port Development Corporation
Ltd's 2016 results.
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