CEO: Ansa McAl managing forex pinch

DESPITE TT's current foreign exchange (forex) pinch having an impact on its automotive segment and the recent acquisition of a US-based chlor-alkali manufacturing company for more than US$300 million, Ansa McAl CEO Anthony N Sabga III expressed confidence that the group had the wherewithal to manage forex challenges.

He made the statement during a media conference at which the group officially revealed its financial results for the year ending September 30, 2024, at the group's office at the Tatil building on Maraval Road.

“Without a shadow of a doubt, I think it is clear that we have a shortage of incremental generation of forex in TT,” Sabga said. “Our reserves are still fairly healthy.”

He said the reserves had been utilised in the proper manner to provide a buffer against any forex shortages. He added that the country was in a better position, as far as reserves are concerned, than it had ever been.

“We do have an ongoing challenge, one that is not going to be resolved overnight,” he said. “(It) is going to require others – manufacturers and others like ourselves – seeking to make investments in other jurisdictions and the ongoing possibility of diversification in our own economy so that we may attract hard currency outside of oil and gas.”

In the group's financial results for the nine months ending September 30, Ansa reported a total revenue of $5.2 billion, up from $5.13 billion for the same period in 2023.

It reported a profit before tax of $568 million, up from $468 million the year before.

The construction, manufacturing, packaging and brewing segment of the group earned $2.3 billion in revenue, up four per cent or $83 million from the same period the year before. Profit before tax was reported to be $358 million for the segment, up $91 million or 34 per cent from the same period the year before.

Banking and insurance segments saw an incremental decrease in revenue year-on-year, reporting $955 million in revenue, down six million dollars or one per cent from the year before. However it reported $149 million in profit before tax, an increase of $22 million or 17 per cent from the year before.

But the automotive, trading and distribution segment, despite seeing a three-per-cent or $46 million increase in revenue, bringing it up to $1.7 billion it still saw a five-per-cent reduction in profit before tax, reporting $125 million in profits.

Ansa chief financial officer Nicholas Jackman said the automotive, trading and distribution segment was where the group felt the forex pinch the most .

“You have been hearing rumblings about forex and we are not immune to that effect. That forex availability would have impacted our stock availability and we would have had some challenges with regard to getting the right things on the shelves for our consumers,” he said.

He noted that the segment was seeing growth outside of TT’s borders, namely in Guyana and Barbados.

Sabga also noted that domestic demand for electric and hybrid cars were also experiencing some growth.

Along with management of reserves, the group said its latest acquisition, Bleachtech LLC, would position itself to be the group’s highest earner of hard US currency and the group’s second largest profit pool.

The group completed the acquisition of the company on November 1 and announced the acquisition on November 5.

At the conference, Jackman said Bleachtech LLC was bought for US$327 million. He said the acquisition was funded by a five-year loan from Citibank to the tune of US$200 million and a $127 million equity injection from Ansa Mc Al through its acquisition subsidiaries.

The acquisition raised the groups gearing ratio – the comparative ratio of capital or owner equity to money borrowed by the company – to 29.5 per cent, a level which which the group remains comfortable.

The group said payment of the loan will come through the company and as it is a US-based company that serves US customers it may be inoculated from any looming tariffs that may come out of policies from the newly-elected US president.

“Bleachtech LLC has the wherewithal to repay the entire loan. This is a US$50 million-a-year business. At $50 million a year, to pay off $200 million in five years – we we believe is fairly doable,” Sabga said. “We believe we can turn this asset well beyond US$50 million, into US$60 million and beyond.”