Ansa McAl still confident despite half-year decline in profits

ANSA McAl incurred a significant decline in its after-tax profits to $32.8 million over the six-month period ending June 30, 2022 compared to $225 million in the same period in 2021, the group reported on Thursday.

But at its annual general meeting at the Tatil Building, Port of Spain, on Thursday, group CEO Anthony N Sabga III said they weren’t losing any sleep over the declines, expressing a positive outlook on the conglomerate’s overall financial position.

The group reported that its profit before tax was down $211 million, or 69 per cent, posting $93 million compared to $305 million last year. Earnings per share also took a nosedive from $1.11 to 16 cents – a decline of 86 per cent.

Group chief financial officer Nicholas Jackman said the decline in profits and earnings was attributable to significant mark-to-market losses in its investment portfolios in banking and insurance. Jackman pointed out a 2.2 per cent dip in the group’s $5.2 billion investment portfolio.

Anthony Sabga III added that the group, which has existed for more than 140 years, has to think about the long game rather than focus on immediate shocks and declines. He recalled that in 2008 there was a similar shock to the market, but eventually it made a full recovery.

“If there is anything that I have learned in this game of investing, it is that it is not about using a microscope, it’s about using a telescope,” he said. “The world is in an interesting place. With uncertainty comes uncertainty in the market and the market has been reflecting that.

"But we are playing a very long game here. When one considers that BlackRock Investment Company has announced more than US$1 trillion in mark-to-market losses, I am still able to sleep well at night.”

Similar impacts were also reflected in Ansa Merchant Bank’s unaudited interim financial results shared separately on Thursday. It recorded a loss of $133.3 million in the six months ending June 30, as compared to a profit of $160.8 million, last year, citing non-cash mark-to-market losses in its investment portfolios.

Ansa Merchant chairman A Norman Sabga – who is also the group executive chairman – said in his statement that the bank's performance was still encouraging when compared to returns internationally and locally.

He said the TT Composite Index declined overall by -7.71 per cent, S&P 500 declined by -20.58 per cent, and the Bloomberg Aggregate Bond Index declined by -10.35 per cent.

On the upside, the group saw an increase in revenue of 18 per cent, or $470 million, up to $3.15 billion from $2.68 billion. Total assets grew six per cent to $17.03 billion from $16.63 billion.

With regard to revenue increases, the manufacturing, packaging and brewing sector grew by $344 million; automotive, trading and distribution by $115 million; and media, retail and parent company revenues by $18 million.

Similarly, Ansa Merchant’s statements showed growth in revenues after removing market effects on investments showing an increase in core profits of about nine per cent.

Norman Sabga tipped his hat to the team of investors for their ability to manage the bank's investment portfolios despite overall declines in the global and regional markets.

“We have beaten the benchmark by any margin and that is what I want us to focus on,” he said.