Mixed financial results for NFM, TSTT

National Enterprises Ltd (NEL) has reported $131.3 million fair value in investee company National Flour Mills (NFM) for the fiscal year ended March 31, 2021. But TSTT, another investee company, had a 35 per cent decline to $248.6 million.

In its annual report released on Thursday, NEL, which owns 51 per cent shareholdings at NFM, said the value represented a 99 per cent increase from the previous year, which was $67.4 million.

It added that in 2020 NFM’s operating profit increased by 170 per cent, and made a net profit of $23.4 million, a 285 per cent increase from 2019.

“NFM was one of the best-performing stocks on the TT stock exchange that year,” the report said.

The report added that NFM continued to improve its operational efficiency and strategic purchases since impacts of the covid19 pandemic continued to affect supply chains.

The report said, “NFM was particularly affected by the disruptions to the supply chain, which resulted in steep increases in the price of grain and severe logistical challenges impacted on the timely receipt of raw materials.

“The NFM team rose to the challenge and kept the market adequately supplied, absorbing some of the cost increases generated in the feed grain price in the last fiscal quarter of 2020.”

Plans to improve the business process, the report said, included a more agile workforce, improved automation and technology and e-commerce capability.

NEL also reported that TSTT's fair value was $248.6 million. It has a 51 per cent shareholding in TSTT and Cable and Wireless, now called Liberty Group, owns the remaining 49 per cent.

NEL said the fair value for 2021 represented a 35 per cent decrease in value from $382.5 million in 2020.

The report said the negative performance was a result of a changes in consumer uses due to the covid19 pandemic, but TSTT has taken steps to increase profitability.

It said customers’ pattern of consumption included reduced prepaid mobile revenue for voice and data because customers switched to broadband/Wi-Fi products and services.

“TSTT expects to undertake various initiatives that include cash management, cost-saving and other efficiency-related strategies, which are expected to yield significant increases in profitability from 2022 and onward, when successfully implemented,” the report said.

NEL is an investment holding company that holds several direct and indirect investments in companies considered key contributors to the economy. The companies are NFM, NEL Power Holdings Ltd, NGC NGL Co Ltd, NGC LNG Ltd, Pan West Engineers and Contractors Ltd, TSTT and Tringen.