Ansa feeling seabridge stress

CARLA BRIDGLAL

THE country’s largest conglomerate, Ansa McAl, has not been immune to fallout from the inter-island seabridge shutdown, with group chief executive Andrew Sabga reporting a drop in demand — as well as challenges delivering stock to Tobago.

“The big problem is, demand has significantly curbed because people are having problems getting to and from Tobago. A large portion of the consumption is tourists and non-Tobagonian arrivals,” Sabga said during the group’s annual stockbrokers’ meeting at Kam Wah Restaurant in Port of Spain yesterday.

Norman Sabga, the group chairman, added that the company has still satisfied its obligations to customers. It’s now up to the government to do what they have to do to correct the situation to the benefit of all citizens, he said.

The company used state-managed vessels to transport its cargo, N Sabga said, because that service is highly subsidised.

“If we had to hire a vessel to take goods to Tobago, the cost would be three times (what it is now). Airfare and shipping is highly subsidised, so to make a profit we have no choice but to use the vessels that are there,” he said.

N Sabga also suggested that a devaluation to the TT dollar would help manufactures, like Ansa McAl, be more competitive.

“It’s Economics 101. If you do. Devaluation of all your fixed costs in TT dollars will go down (compared to costs in foreign currencies),” he said.

The company was also not immune to the foreign exchange crunch. N Sabga acknowledged the difficulty in acquiring foreign exchange but they have managed to satisfy its creditors and have not defaulted on any payments. He added as well that while the company earns foreign exchange, it is still a net consumer.

Overall, for 2017, the company recorded a profit of $967 million, 13 per cent lower than the previous year’s $1.107 billion.

Revenue increased four per cent to $6.244 billion versus $6 billion in 2016. Taxes have a big impact on profit, as the effective tax rate for 2017 increased from about 25 per cent in 2016, to 33 per cent in 2017, as the statutory rate was raised from 25 per cent to 30 per cent for companies in the 2017/2018 Budget, along with increases in the business and green fund levies.