NEL narrows loss to $348.7m

STATE-CONTROLLED  investment company National Enterprises Ltd (NEL) has reported a net loss of $348.7 million for the financial year ended September 30, 2024.

While substantial, this represents a 23 per cent improvement from the $455.1 million loss recorded in 2023.

Chairman Ingrid Lashley celebrated the progress amid difficult conditions.

"This $106.4 million variance underscores our ongoing efforts to navigate challenging market conditions," she said.

NEL’s total assets fell to $2.7 billion in 2024 from $3.3 billion in 2023, reflecting fair value adjustments in its investment portfolio, particularly in the energy sector.

Operating profit declined by 70 per cent, from $391.3 million in 2023 to $120.4 million in 2024, driven by a sharp drop in dividend income, which fell to $113.1 million from $382.7 million.

The independent auditor’s report confirmed consistency between the summary and audited financial statements but noted they lacked the full disclosures required under international financial reporting standards.

Despite its challenges, NEL returned $234 million in dividends to shareholders in 2024 after a $300 million payout in 2023.

Over two years, the company has distributed more than $500 million, reflecting a dividend yield of approximately 5.4 per cent.

This focus on shareholder returns, however, has strained liquidity. NEL ended the year with $29.4 million in cash resources, a steep decline from $242.6 million in 2023, attributed to reduced operating cash flow and substantial dividend payments.

Cash generated from operating activities dropped from $403.4 million in 2023 to $113.5 million in 2024, owing largely to reduced dividend income.

Additionally, NEL recorded a net cash outflow of $92.7 million from investing activities as it rebalanced its portfolio.

NEL’s energy investments faced turbulence.

Trinidad Nitrogen Company Ltd (Tringen) fair value dropped by 25 per cent, from $1.46 billion to $1.1 billion.

Pan West Engineers Constructors LLC and NGC NGL Company Ltd recorded similar declines.

In contrast, the non-energy portfolio delivered a 24 per cent increase in fair value.

National Flour Mills and Telecommunications Services of TT achieved profit growth and enhanced market positions, while the Power Generation Company of TT posted a 12 per cent increase in value.

Lashley expressed optimism about NEL’s future, citing disciplined asset management and diversification efforts.

"With disciplined asset management, adherence to rigorous accounting standards and a strategic focus on diversification, NEL stands well-positioned to confront the challenges ahead and deliver sustained value for all stakeholders," she said.

NEL was incorporated by the government in 1999 to consolidate state investments and facilitate public offerings on the TT Stock Exchange.

While historically reliant on energy returns, the company has faced volatility in recent years.

Its diversification strategy, focusing on non-energy investments, is said to be central to its long-term growth plans.