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Businessuite 2023 #1 Trinidad and Tobago Company by US$ Profit after Tax – National Enterprises Limited
| Businessuite 2023 #1 Trinidad and Tobago Company by – US$ Profit after Tax | |||||||||
| TT | TT | TT | TT | TT | TT | US$000 | US$000 | ||
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | Company | 2022 | 2021 | |
| 1 | 21 | 1 | TT | National Enterprises Limited | $292,000 | -$40,183 |
National Enterprises Limited (NEL) is an investment holding company incorporated on August 27, 1999 by the Government of the Republic of Trinidad and Tobago. NEL was formed to consolidate the Government’s shareholding in selected State Enterprises and facilitate public offerings on the Trinidad and Tobago Stock Exchange.
NEL has invested in industries that drive the economy of Trinidad and Tobago: natural gas and energy-based manufacturing, telecommunications, power generation, and the marketing and manufacturing of basic foods.
NEL holds significant shareholding in the following companies:
• NGC NGL Company Limited (NGC NGL);
• NGC Trinidad and Tobago LNG Limited (NGC LNG);
• Telecommunications Services of Trinidad and Tobago Limited (TSTT);
• Trinidad Nitrogen Co. Limited (TRINGEN);
• National Flour Mills Limited (NFM);
• NEL Power Holdings Limited (NPHL); and
• Pan West Engineers and Constructors, LLC (Pan West).
Through NEL, individual and corporate investors can share in the financial stability and staying power of these enterprises. Today, over 5,000 citizens who will continue to benefit from our consistent dividend payments own 100 million of the 600 million issued shares in NEL.
As of September 30, 2022, the fair market value of National Enterprises Limited’s (NEL) equity investments in subsidiaries, joint ventures and associate companies based on IFRS 9, was TT$3.42 Billion, an increase of 92% compared to the $1.78 Billion as of March 31, 2021, the last reporting date.
NEL’s Financial Position
For the financial period ended September 30, 2022 (FY2022), NEL recorded a net profit of $1.98 Billion, an increase of over $2 Billion as compared to the previous financial year (FY2021), where NEL recorded a loss of $270 Million.
NEL’s increased net profit over the eighteen-month financial period ended September 30, 2022 includes the unrealized fair value gain of $1.7 Billion from NEL’s portfolio companies in the energy sector.
NEL Power Holdings increased by $21.3 Million or 19.7% over its value as of March 31, 2021. This was offset by declines in the fair values of Telecommunications Services of Trinidad and Tobago Limited (TSTT) and National Flour Mills Limited (NFM).
NEL also registered an operating profit of $297 Million in FY2022 versus the $28 Million recorded in financial year ended March 31 2021 (FY2021).
Management has continued with prudent cost management practices while pursuing operational efficiencies. Operating expenses in FY22 have remained consistent at $8.8 Million for the eighteen-month period compared to $4.99 Million for the twelve-month FY2021.
Portfolio Performance Summary
Energy Portfolio
Trinidad Nitrogen Co. Limited (Tringen) performed exceptionally and delivered unrealized fair market value gains of over $2 Billion in FY2022 was offset by declines in fair value of the other companies in our energy portfolio.
The surge in ammonia prices carried through from the last part of 2021 well into 2022 primarily due to tightening of supply in the middle of rising global demand for fertilizer. Notwithstanding some volatility experienced towards the end of 2022, ammonia prices are projected to be maintained for at least the next 12 months.
NGC NGL Company Limited and Pan West Engineers and Constructors, LLC are holding companies for NEL’s shareholding interests in Phoenix Park Gas Processors Limited (PPGPL). Together with NEL’s investment stake in Trinidad and Tobago NGL Limited that is listed as NGL on the Trinidad and Tobago Stock Exchange, it provides for approximately 14% indirect ownership in PPGPL. PPGPL’s acquisition of Hull Terminal in Texas, USA for the distribution of products like propane, butane and isobutante provides the opportunity to increase its customer base via pipeline rail and road in conjunction with Twin Eagle Liquids Marketing LLC, which was acquired in 2020.
PPGPL also acquired an NGL terminal in Rush City in December 2022, giving it a market entry into one of the largest consuming regions in the USA. This industry experienced price volatility and steep cost increases in 2022.
NGC Trinidad and Tobago LNG Limited (NGC LNG) is NEL’s investment holding company that owns 10% shareholding in Atlantic LNG Train 1. The value of NEL’s investment in NGC LNG was written down in March 2021 to reflect that there are no ongoing material operations amid the discussions for the restructuring of Atlantic LNG between the Government of the Republic of Trinidad and Tobago, NGC and the other major shareholders.
Non-Energy Portfolio
NEL Power Holdings Limited (NPHL) is a wholly-owned subsidiary of NEL that has a 10% shareholding in The Power Generation Company of Trinidad and Tobago Limited (PowerGen).
PowerGen’s increase of $21.3 Million in fair value was offset by declines in the Telecommunications Services of Trinidad and Tobago Limited (TSTT) (35%) and National Flour Mills Limited (27.8%). PowerGen continues to deliver stable financial results and has successfully met demands for increased capacity from the Trinidad and Tobago Electricity Commission (T&TEC) during the past fiscal year.
TSTT completed its restructuring exercise in July 2022 and together with the other non-personnel saving measures implemented over the past two years the company expects to realize $340 Million in annualized savings.
TSTT’s Data Centre was the first in the region to achieve TIA-942-B (Rated 3), DCOS 3 and SOC 2 international standards certification. TSTT provides data services as Disaster Recovery as a Service (DRaaS), Infrastructure as a Service (laaS), and Backup as a Service (Baas), and for the past 15 years has also provided home and business security solutions to the market.
NFM has faced rising costs through higher grain prices and supply chain disruptions. The company recorded a profit after tax of $1.4 Million in 2021 and experienced a decline of its share price by 23% at year’s end. In addition to reducing costs, NFM’s focus continues to be the upgrade of its plant and machinery, innovation and automation, as well as maintaining the highest levels of quality through its Food Safety and Quality Management System.
NEL’s Investment Portfolio by Industry
NEL’s Retained Earnings have significantly increased from $407 Million in FY2021 to over $2.2 Billion in FY2022. This is the highest level of Retained Earnings for the past five years.
The positive income results for FY2022 have facilitated the cumulative total dividend payment of $0.46 per share for the period ended September 30, 2022.
Three interim payments have been paid:
• First interim dividend of $0.03 – December 15, 2021
• Second interim dividend of $0.25 – September 28, 2022
• Third (final) interim dividend of $0.18 – to be paid on January 30, 2023
New Fiscal Year
The company’s financial year end is now September 30th. This change was made to ensure timely and consistent filing of financial reports while improving the company’s risk management and forecasting ability. This change led to the creation of an 18-month period for the financial period ended September 30th, 2022.
Our focus on delivering optimal value to shareholders remains undiminished as we seek to be flexible and adapt to rapidly changing conditions. We will do so through continued sound governance, engagement with our stakeholders and communities with continued operational efficiency.
Charles Maynard
General Manager National Enterprises Limited
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