Sabga: Ansa McAl strong despite challenges

DESPITE what he described as a challenging start to 2025, Ansa McAl CEO Anthony N Sabga III says the company is doing well with its long-term growth strategy and has remained financially resilient.

He was speaking at the group’s quarterly investor briefing on May 15 at Saaman Estate, Port of Spain.

Sabga stressed the group’s commitment to sustainable growth, diversification, and value creation.

“We are structured in a way that allows us to deliver an excessively transformative future.

“Our diversification approach enables us to act in a responsible, sustainable, and impactful manner in every market we serve.”

Despite facing weather-related disruptions, including what he referred to as the “great freeze” in the US Midwest, which affected plant operations, Sabga remained optimistic.

“This is not a systemic issue – it’s a seasonal glitch,” he said, citing adverse weather conditions that impacted operations at their newly acquired Bleach Tech facility in Ohio.

In 2024, the group announced the acquisition of US-based chlor-alkali manufacturer Bleach Tech LLC through its subsidiary, Ansa Chemicals. The deal, valued at US$327 million, marks the largest acquisition in the Caribbean conglomerate’s 143-year history.

Headquartered in Cleveland, Ohio, Bleach Tech operates two chlor-alkali plants located in Seville, Ohio, and Petersburg, Virginia. The facilities produce industrial chemicals, including sodium hypochlorite (bleach), sodium hydroxide (caustic soda), and hydrochloric acid, and play a strategic role in Ansa McAl’s expanding chemical portfolio.

Sabga said the plant was operating at 44 per cent efficiency when it was acquired, but today, operating efficiencies are 60 per cent and continue to trend upwards. He described the acquisition as both transformative and strategic.

Discussing the group’s financial front, he said it recorded a ten per cent increase in top-line revenue and substantial growth in operating cash flows for quarter one. Quarter one refers to the first quarter of the financial year, which covers the months of January, February, and March.

However, earnings before tax (PBT) fell by 46 per cent, or $80 million, and earnings per share declined by 49 per cent. Sabga attributed much of the decline to “one-off” items, including interest expenses tied to recent acquisitions and amortisation.

Amortisation refers to spreading out the cost of an intangible asset like a patent, trademark, or, in this case, a business acquisition.

“We’ve taken on significant leverage, but in a prudent and financially responsible manner that gives us flexibility,” he noted.

Sabga also discussed a shift in the group’s investment philosophy: “Our ways of operating previously were focused on preservation and passive yield. The dynamic has fundamentally changed. We are now seeking substantial reinvestment into our business.”

One major pivot includes the diversion of dividends in favour of reinvestment, part of a broader strategy aimed at scaling the group’s growth pillars across industries.

He spotlighted the group’s beverage business as a continuing success and pointed to the banking division as a key area of focus, “poised to deliver scale” through recent investments in both acquisitions and technology.

Looking ahead, Sabga underscored the group’s hemispheric ambitions.

“We see a huge opportunity to replicate scale and capability in our chlorine business across the region,” he said, drawing on over 40 years of experience operating in the Caribbean.

Despite the underperformance of the local stock market, Sabga remained firm in the group’s commitment: “We remain committed to the endeavour, the investment climate, and the possibilities available to us. The foundation of our growth remains strong governance, environmental integrity, and long-term sustainability.”

Responding to questions from reporters, Sabga addressed whether the company had received any formal complaints from shareholders amid the market fluctuations. He offered measured reassurance.

“We haven’t received any formal complaints. What we’ve seen are a few public letters and opinions expressed in the press by individuals who felt compelled to share their views.”

He said the group had engaged with shareholders who left earlier in the year but noted what he called an interesting trend.

“Some of those who sold their stock have already begun to return. In many cases, their decisions were personal, based on individual circumstances, not a loss of confidence in Ansa McAl.”

He also spoke about the emergence of a new generation of investors entering the group’s stock.

“These are individuals who strongly align with our core values, governance, sustainability, and long-term impact. They believe in our journey of transformation and are excited by the direction we’re taking.”

According to Sabga, internal market research continues to reflect strong investor sentiment and confidence in the group’s long-term strategy.

On the topic of further acquisitions, Sabga reaffirmed Ansa McAl’s commitment to growth, even after completing its landmark purchase of Bleach Tech.

“Our immediate focus is on successful integration and execution. Despite the early-year challenges, we’re pleased with the progress so far.”

While declining to name future targets, he confirmed that the group’s acquisition strategy remains active.

“We’re not in a position to disclose specifics, but we have a strong and well-aligned pipeline. Pursuing meaningful, long-term value through acquisitions is part of who we are.”

Sabga also addressed concerns about trade barriers, referencing the 90-day tariff policies introduced under US president Donald Trump.

“Our region has benefitted from timely negotiations through key trade organisations. We’re already seeing some easing of tariffs, particularly in shipping.”

He stressed the group remains prepared for external disruptions.

“Tariffs are part of global business. We don’t panic we focus on maintaining strong operational fundamentals. Every day brings new challenges, but we remain agile, disciplined, and grounded in sound business practices.”