INDIVIDUALS and institutions that invested in Phoenix Park Gas Processors Ltd (PPGPL) are seeing returns so far this year as the investment vehicle, TTNGL, earned an after-tax profit of $50 million in the first quarter of 2021, said a statement on Friday by the National Gas Company (NGC) which remains the majority shareholder in PPGPL.
The statement was titled, TTNGL profitability for Q1 2021 improves by 622 per cent.
The NGC created the TTNGL to let the public buy shares in Phoenix Park by an initial public offering (IPO) in 2015 and an additional public offering (APO) in 2017.
Billed as TT's largest ever IPO, in 2015 some 75,852,000 class B shares in TTNGL worth $1.51 billion worth were offered at $20 per share.
The TTNGL website said by way of the IPO and APO, the public (individuals and institutions of Trinidad and Tobago) holds 75 per cent of the TTNGL, and the NGC holds 25 per cent.
TTNGL owns 39 per cent of Phoenix Park, the NGC NGL Company Ltd (NGC NGL) owns 51 per cent and consortium, Pan West Engineers and Constructors owns ten per cent.
NGC NGL is effectively owned by NGC (80 per cent) and by National Enterprises Limited (20 per cent).
The TTNGL statement on Friday said after a year of upheaval in global economic and energy markets, TTNGL had rebounded to earn an after-tax profit of $50 million for Q1 of 2021, up from $6.9 million for Q1 of 2020.
"The upturn in profits translates into earnings per share of TT$0.32 for shareholders compared to TT$0.04 for the same period last year."
NGC chairman Conrad Enill in his report for Q1 2021 said TTNGL’s improved profitability was owing to more profit from its underlying asset, PPGPL.
"PPGPL’s enhanced performance was driven by higher Mont Belvieu prices for Natural Gas Liquids (‘NGLs’), which were 49.8 per cent above the first quarter of 2020. This trend began in Quarter 4 2020 and continued into Quarter 1 2021, as markets recovered from the effects of the covid19 pandemic."
Mont Belvieu in Texas is a hub of pipelines transporting propane and serves as a spot market whose prices hugely influences propane prices elsewhere.
"PPGPL’s profit is also reflective of a 7.1 per cent improvement of NGL production from gas processing through deliberate efforts by the NGC, with an 11.9 per cent increase (versus 2020) in NGL content in the natural gas stream. Additionally, PPGPL has successfully advanced its marketing efforts to renew key sales contracts for the lucrative Eastern Caribbean market."
Advances in the product trading strategy also gave economic returns in early 2021.
"PPGPL’s robust performance was bolstered by the operations of its North American subsidiary, Phoenix Park Trinidad and Tobago Energy Holdings (PPTTEH), which contributed approximately eight per cent of PPGPL’s profit after tax.
"PPTTEH experienced high trading volumes and benefited from improved margins derived from the contracts with its counter parties."
Earnings from PPTTEH were expected to continue to contribute positively to PPGPL’s future results.
"Moreover, the outlook for PPGPL and TTNGL continues to show favourable trends, despite the persistence of short-term volatility arising from the uncertain impact the pandemic may have on regional and international NGL markets."
Enill said, “PPGPL has been resilient in managing the effects of the pandemic by retaining its markets, maintaining high levels of plant reliability and availability, as well as high customer satisfaction indices. These efforts, coupled with PPGPL’s continued drive for strategic value creation initiatives and opportunities, will underpin the development of long-term shareholder value.”