TWO of T&T’s largest and oldest publicly listed, private sector groups have announced restructurings of parts of their sprawling empires—a possible indication of the delayed impact that the five-year downturn in the domestic economy is finally having on the corporate sector.
The ANSA McAL group of companies yesterday advised that ANSA Technologies Ltd will undergo a “restructuring exercise” from Monday, December 30 that will involve the displacement of workers.
Insiders told the Sunday Express that they were alerted to the development when ANSA McAL group vice chairman, Andrew Sabga, visted the San Fernando-based, energy sector equipment service and supply company on Friday to convey the news.
In a preliminary statement yesterday, ANSA McAL assured the trade and its customers that product availability and project services will not be affected as a result of the restructuring.
The group said ANSA Technologies has approximately 50 employees and that “the company recognizes that this decision will have a significant impact on the employees and their families and has decided to consult with employees and offer a VSEP (Voluntary Seperation of Employment Plan) payment to displaced workers.”
The group said it would also “attempt to absorb the displaced workers to fill vacancies that may exist” elsewhere in the group based on suitability. The conglomerate, T&T’s largest, pledged as well to extend counseling and financial guiding services where necessary.
“This decision places the construction sector in a better position to endure the depressed economic market and will enable the sector to remain competitive in the market, ensuring sustainability of the industry in Trinidad and Tobago, and the region,” said ANSA McAL.
ANSA Technologies was established in 2004 through the merger of Hardware & Oilfield Equipment Company Ltd and HJ Gransaull & Company.
For the nine months ended September 30, 2019, ANSA McAL generated revenues of $4.71 billion that were 3.6 per cent ahead of its 2018 numbers. The group’s after-tax profit for the first three quarters of its financial year amounted to $442.4 million, which was 2.7 per cent less than for the same period in 2018.
In his chairman’s statement, ANSA McAL’s executive chairman Norman Sabga said: “Without the one-off restructuring costs, the group’s profit after tax increased by 3 per cent over the prior year.”
Earlier this month, ANSA McAL announced that Anthony Sabga III was appointed to the role of Group CEO, effective on January 1. His uncle, Andrew N. Sabga was appointed to the role of deputy chairman of the ANSA McAL board, while Norman Sabga remains as executive chairman.
Also planning a year-end restructuring is the Agostini group, which announced on Friday that the two Agostini Interiors retail stores located in Port of Spain and San Fernando would be permanently closed with effect from December 31.
In a statement, Agostini said: “This decision to exit the retail segment was not taken lightly and is the result of a decision to realign the company around our core business of serving the contracts and projects segments of the market with our contracting services and range of building materials from Armstrong, USG, SIKA and Hilti.”
The conglomerate said that it is about to conclude negotiations with a paint distributor to make the Pratt and Lambert brand of paint available nationwide.
For its financial year ended September 30, 2019, Agostini generated $3.27 billion in revenue from contracts with its customers, which was an increased of less than 1 per cent over its revenue performance for 2018. The group’s profit after tax increased by 12 per cent to $162.9 million in 2019 compared with the year-earlier period.
About 58 per cent of Agostini is owned by the Mouttet family and Riaz Ahamad and the National Insurance Board are among the company’s top shareholders.
Agostini, through its Smith Robertson holdings, is one of the largest pharmaceutical and personal care distributors in T&T. The group also owns SuperPharm, the pharmacy chain and is involved in a 50/50 joint venture with Goddard Enterprises of Barbados for Caribbean Distribution Partners Ltd, which is the parent company of eight Fast Moving Consumer Goods (FMCG) and manufacturing companies operating in six regional market.
In its Monetary Poliy Announcement on Friday, the Central Bank said: “In the non-energy sectors, preliminary data for indicators monitored by the Central Bank point to modest expansions in the distribution and finance sectors during the third quarter. An uptick in local sales of cement suggests that construction activity is responding to the rise in public sector infrastructural investments.”
Allied to some expansion in the non-energy sector, the Central Bank also flagged positive developments in the energy sector: “In the third quarter of 2019 natural gas production increased to 3,604 million cubic feet per day (mmcf/d), 3.7 per cent above output in the same quarter of 2018, despite maintenance shutdowns at two large natural gas platforms.
“This spurred year-on-year increases in petrochemicals (23.3 per cent) and liquefied natural gas (8.0 per cent).”
For the last five years, the International Monetary Fund has pegged the T&T economy as having grown by 1.8 per cent in 2015, declined by 6.5 per cent and 1.9 per cent in 2016 and 2017. The IMF says the domestic economy grew by 0.3 per cent in 2018 and predicts that the economy will flatline in 2019.