Friday, December 5, 2008

Billionaire businessman Lawrence Duprey believes his CL Financial Group

Published: Fridaay December 5, 2008

Billionaire businessman Lawrence Duprey believes his CL Financial Group, which recently acquired Jamaica's Lascelles DeMercado, has seen opportunities in the ongoing financial crisis around the world.

The CL Financial chairman has decided to form a network of subsidiary brokerage companies the group owns around the world to acquire new assets at bargain prices.

Brokerage and financial services firm Caribbean Money Market Brokers - a CL Financial subsidiary - will be the central node around which a network of global brokerage houses will be built.

Duprey, who is chairman of CMMB, recently met with the heads of brokerage operations in the CL Financial Group and told them the global financial crisis offered a "unique opportunity to acquire assets at greatly undervalued prices".

Duprey told his brokerage executives that CMMB, along with the other firms in the group, would be taking advantage of this situation, the statement added.
CL Financial owns brokerage operations in the Caribbean, Central America, New York and London.

With Port of Spain-based CMMB linked to these brokerages, it creates a network through which CMMB and other investment houses can access liquidity and trade in a wide range of instruments, Duprey said.

CL Financial, which owns more than 70 companies in 32 countries, is registering a brokerage house in the Middle East, which continues to have a significant amount of liquidity given its oil and gas revenues.

The CL Financial Group owns and operates a methanol plant in Oman and is seeking to establish two more plants in Saudi Arabia and Qatar.

To achieve these goals, Duprey has appointed former CMMB managing director Ram Ramesh as vice chairman of the company.

Management consultant and former chief executive at what used to be tourism promotion company, Tidco, Vishnu Ramlogan, has also been appointed a CMMB director.


Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081204T220000-0500_143359_OBS__B_BILLIONAIRE_BUSINESSMAN_LAWRENCE_DUPREY_BELIEVES_HIS_CL_FINANCIAL_GROUP__B_.asp

Scotia DBG joins billion-dollar profit club

Published: Friday December 5, 2008

Scotia DBG Investment Limited (SDBG) has, for the first time, recorded net pro-fit above one billion dollars, a performance chief executive officer Anya Schnoor has credited to growth in funds under management and growth by acquisition.

ScotiaDBG reported net profit of $1.2 billion at financial year ending October 31, 2008.

"This reflects a credible performance for Scotia DBG," said Schnoor.

"Despite a challenging fiscal year both in Jamaica and the financial markets worldwide, we managed to produce a record year of profitability."

Schnoor and her team grew profit by 81 per cent, due in part to the merger of Scotia Jamaica Investments Management Limited (SJIM) into Scotia DBG, and general growth in product lines the company reported.

Schnoor has indicated that the company will continue to build on the strategies that worked so well in the year just ended.

"During 2009, the focus will be on expanding our distribution channels in partnership with the overall Scotia Group, looking for ways to make the organisation more efficient and bringing to the market products and services which meet the demands of our clients," she told the Financial Gleaner.

Net profit increase

The increase in net profit generated earnings per share of $2.93.

Net interest income for the reporting period amounted to $1.96 billion.

Gains were also reported on securities and foreign currency trading bringing the company's total operating income to approximately $2.6 billion.

According Scotia DBG, which is among the top ten brokerage houses, the focus going forward will be on the continued restructuring of the operation.

The company has already sold its Trinidad branch to Scotiatrust and Merchant Bank Trinidad and Tobago Limited, but did not disclose the price.

The Trinidad operation repre-sented less than one per cent of the company's revenue.

With the acquisition of SJIM by Scotia DBG funds under management moved to $84.5 billion, while its branch network grew from seven to 19 access points, leveraging on its connection with parent company Scotia Group Jamaica.

The company has approved a dividend of 27.5 cents per stock unit, totalling $116 million, payable in January to shareholders on record as at the end of December.


Source:
Sabrina Gordon
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081205/business/business5.html
sabrina.gordon@gleanerjm.com

Lascelles rakes in $3 billion profit

Published: Friday December 5, 2008

Lascelles deMercado and Company, which deals predominantly in wines and spirits, made $3 billion of net profit in the year just ended, September 30, on strong performance in most business segments.

But the William McConnell-led conglomerate, for which $3 billion is a new profit record and a 13 per cent improvement on last year's $2.7 billion, said it could have done better were it not for disappointing returns from its sugar estate.

"The performance of the company overall was below expectations," said Finance Director Anthony Bell.

"The wines and spirits segment was below expectations due to losses incurred in our cane and sugar operations. Although the spirits division experienced growth, it was not sufficient to offset the losses in sugar."

Bad weather

The losses attributed to cane and sugar amounted to approximately $500 million against the com-pany's original break-even target.

"Bad weather conditions, which commenced with Hurricane Dean in August 2007, led to a reduction in cane quality and quantity beyond that which we had estimated," said Bell, adding that increased usage of fuel at higher costs also significantly affected operations.

Bell also explained that the division was dealt another blow with the passage of Tropical Storm Gustav in August 2008, and had to take a write-down of approxi-mately $220 million on future crop quantities in the company's year-end financial results.

New year investments

Notwithstanding, the broader 'liquors, rums, wines and sugar' segment, which represents the largest business unit, accounted for 59 per cent of the group's revenue, contributing approximately $13.6 billion.

In the year ahead, Lascelles will be investing $1.6 billion in capital projects, but Bell said global conditions did not allow for accurate forecasts of how the business would likely perform.

The company is planning a new distribution warehouse for its merchandise division, and new bottling equipment and additional ageing warehouses for rum for its primary operation, Wray and Nephew, said the finance director.

Within the year just ended, total revenue came within a nose of $23 billion, up from $19.5 billion in the year ending September 2007.

The "increase in the spirits segment was mainly due to growth in the international markets and price increases in the local market," said Bell.

"A very small amount of Angostura products would have been included in this segment," he added.

Some 92.01 per cent of voting rights in Lascelles is now owned by CL Spirits Limited, a holding company created by Angostura and its parent CL Financial group of Trinidad to effect the takeover that was initiated last December and finalised seven months later on July 28.

Synergising operations

Since then, Angostura and Lascelles have been devising plans to synergise their operations. Lascelles, for example, is now Angostura's chief distributor of spirits in this market. CL Financial's owner, Lawrence Duprey, has taken over as chairman of Lascelles, replacing George Ashenheim.

Lascelles' general merchandise and investment segments both reflected huge jump in earnings. Investments for the reporting period more than doubled, moving from $485 million to in excess of $1 billion, though some was credited to book adjustments.

New principals

The general merchandise segment which markets products for several local and international companies, with its latest addition being 3M, reflected an increase of 55.2 per cent.

"The increase in general merchandise is all due to growth in business and the addition of new principals," said Bell.

"The investment segment performed beyond our expectations primarily due to a significant increase in dividends from Carreras and also a significant increase in our IFRS adjustments," he added.

Insurance and transportation services moved by 12.5 and 15.4 per cent, respectively, and performed to expectations, said Bell.

During the financial year, the company also disposed of the Lascelles Telecoms division on July 31, for $93.6 million, resulting in realised gains of $100.8 million, exiting the telecommunications market it had entered in July 2003.

The buyer was not disclosed.

Planned merge

Duprey, on a visit to Jamaica last November, told Lascelles share-holders that he envisions the marriage of its spirits business with that of Angostura's to build a company large enough to comfortably take on big international markets.

Within the expenditure laid out by Lascelles in 2008 was a new half a billion larger bill for administrative and selling expenses.

Those charges, now at $6.2 billion, would continue to climb in 2009.

"Administrative, marketing and selling expenses increased by a moderate seven per cent, but is expected to increase by more in 2009 due to significant planned investments in the international market," Bell explained.

"The planned investments would be a combination of increased marketing spend, in particular in the US market, and capital investments totalling approxi-mately $1.6 billion."


Source:
Sabrina Gordon
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081205/business/business4.html
sabrina.gordon@gleanerjm.com

Cement crisis... again!

Published: Friday December 5, 2008

The local cement industry is yet another victim of the global financial crisis which has seriously impacted the Jamaican economy. According to the general manager of Caribbean Cement Company (the largest supplier of cement in Jamaica) Anthony Haynes, the sector has seen a 30 per cent decline in sales and continues to experience turbulence.

"Without getting into hyperbole, the construction sector is collapsing. If one looks at the first quarter of this year, compared to last year, sales are down 30 per cent and I'm not talking about just Carib Cement, I'm talking about the entire sector! This is, of course, anecdotal because when I talk to people in steel and lumber, they validate these figures. Over the course of this year we have seen a month-by-month steady decline," said the Carib Cement boss.

He further pointed out that total volumes are down 12 per cent compared to last year and the sector continues to contract. But by no means is this peculiar to Jamaica alone. The construction industry the world over is seeing a downturn.

"I was speaking with a colleague who is a cement supplier in Florida who told me that cement production and sales are down 40 per cent there and 30 per cent in other states across America," added Haynes.

Faced with rising input costs, inflation and the precarious state of the local economy, Caribbean Cement took the decision to raise the price of cement by six per cent in August of this year. This followed an earlier increase in January.

During the first half of its financial year, Carib Cement recorded a net profit of $271 million, an increase on the $252 million reported last year. However, for the September quarter this year it suffered a loss of $57 million mainly due to high input costs.

Caribbean Cement has weathered a number of calamities - both natural and man-made - over the last two years, but continues to remain resilient. It has had to endure lower local demand while seeing an increased supply of cheaper cement, particularly from China and Thailand. Last year, a 29 per cent increase in prices assisted in offsetting its decline in revenues. The Government also took measures to eliminate the 40 per cent tariff on imported Portland Grey Cement thus levelling the playing field and so stemming the tide of cheap and, in many cases, substandard product flooding the market.

Over the years 2006 and 2007, there was a boom in construction, so much so that Caribbean Cement's ability to supply the market was called into question. The company announced that it would add a new kiln and would be expanding its production of cement from 900,000 tonnes a year to 1.8 million tonnes a year which would more than adequately supply the market. This exercise will come in at a cost of US$150 million a year.

"All the big construction projects began in 2006 but are now nearing completion," said Haynes. "All these projects such as work on Sabina Park, the Riu hotel have not been replaced with other sizeable projects. What exacerbates the situation in our industry is that the big projects are great but we have always enjoyed good sales with home construction, which we are not seeing now.

This can perhaps be traced back to the collapse of the unregulated financial organisations, the fall-off in remittances and the financial crunch which is gripping the country. I can tell you that the inflows from the unregulated financial organisations certainly had a positive impact on home construction and in turn the cement industry."

Importers of cement have often complained that Caribbean Cement enjoys a monopoly and is protected by the Government. When Caribbean Cement had quality and supply issues many claimed they were vindicated and that the law of supply and demand should prevail. Haynes maintains that the importers of cheap cement do the industry a disservice.

"The market is currently contracting and there is still significant imported cement here in Jamaica; however, in the last quarter these importers have seen their supplies dry up," he said. "In most cases these importers are opportunists and are very unreliable. Last year, in the same quarter when they had supply issues which caused a ripple in the market, we were able to supply all of Jamaica with 225,000 tonnes in sales.

"I predict for this current quarter - that is in 2008 - we will see a market of 185,000 tonnes, which is 40,000 tonnes down on the same quarter last year. Back in 2006 when we had a severe crisis, particularly in the months of March, April and May, the market took 189,000 tonnes. Now you see we are selling less cement than we did during that unfortunate period which caused a lot of grief and strife. Also, the market is taking in 25 per cent less than in the last quarter when Carib Cement supplied the entire market."

In 2004 the Government imposed a 90 per cent duty on imported cement because it deemed dumped cement as unfairly traded. Haynes notes that at this time when the market is contracting, anti-dumping legislation is not being enforced, allowing cheap dumped cement to proliferate. This he sees as being very unfair and should be addressed expeditiously. He points out that if one should raise pricing issues, then Caribbean Cement has always honoured its commitment to keep prices at a certain level and it did so when it was experiencing difficulties.

"What we have found is that every time we have corrected prices the importers have followed us, so the consumer never really gains. Also, the question has to be asked, why is the Government forgoing millions of US dollars in duties from these importers at a time when it is in desperate need of revenues?"

Although he concedes that the global financial crisis has its part to play, Haynes is of the view that the crisis is of itself a failure of globalisation.

"This crisis is not about toxic assets and people defaulting on their loans and mortgages," he argued. "It's about greed, corruption and an absence of regulation. What we continue to see is developing nations seduced by cheap goods to the detriment of national development. Very often these developing countries support regimes that are suppressive and indulge in child labour.

"Then you have manufacturers coming under pressure from trade unions, or environmental groups. Their solution is to shut down the plant and set up in so-called "friendly countries" where they can turn a blind eye to environmental and labour concerns. As you can see, we are now reaping what we have sown. All this financial witchcraft has led to failed policies, which we still continue to pursue.

Albert Einstein once said, 'You can't solve a problem with the same level of thinking that got you into the problem'. The solution to everything is not the free market and globalisation. There must be boundaries and regulations. You must have a conscience and ask yourself what cost are you willing to pay for development."

Carib Cement continues to engage in dialogue with the Government and put forward its position. Haynes went on to say that the country's leading cement supplier has found it extremely frustrating that government policy-makers have not been exactly accommodating.

The company has met with other stakeholders, more notably the Ministry of Labour, not to announce possible lay-offs but to point out that over the last quarter the market has dried up and that there is now a serious risk to the industry. The aim, Haynes says, is to stabilise the industry then get it out of the quagmire and into growth.


Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20081204T190000-0500_143334_OBS__B_CEMENT_CRISIS____AGAIN___B_.asp

Broilers to triple capacity at cogeneration plant

Published: Friday December 5, 2008

Jamaica Broilers Group has a plan to triple capacity at its power co-generation plant in St Catherine, with targeted investment of US$4 million to US$5 million (J$312 million to J390 million).

But Chief Executive Officer Robert Levy says the addition of another 10 Megawatts rests on the finalisation of a power purchase agreement with monopoly Jamaica Public Service Company, which manages the national electricity grid.

Broilers, whose main business is poultry, produces its own electri-city, but generates more than it needs to power its operations.

"Right now, we are producing five MW and we are selling to JPS and using some, and there is real potential of expanding that by another 10 MW," Levy told the Financial Gleaner.

But Levy said the expansion would not commence until he has a deal with JPS, which he hopes to finalise early next year.

No comments from JPS

"We have sent them a whole proposal, however I think they are also assessing (developments)," he said.

JPS chose not to comment, saying the relevant officer was unavailable.

"They might be looking at potential downturn in usage. So, they might be looking at when they are going to need the 10 megawatts," said Levy. "They have promised to get back to us pretty shortly."


Source:
Dionne Rose
Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20081205/business/business2.html
dionne.rose@gleanerjm.com

Friday, November 28, 2008

Jamaica group to track economic fallout

Published: Friday November 28, 2008

Jamaica expects to soon appoint a group of union leaders and employers that would track the effects of the global financial crisis.

Labour Minister Pearnel Charles says the group will report to the government and suggest ways to prevent layoffs. The government recently warned that companies will start dismissing workers but was not specific.

Confederation of Trade Unions president Winston James said job loss forecasts were not available because employers from the tourism and bauxite sectors did not attend Tuesday's meeting.

The government expects to ask multilateral lenders for help in closing a US$250 million budget shortfall.


Source: Nation Newspapers
http://www.nationnews.com/story/296788219277154.php

$431.8m profit:Scotiabank beats economic crisis...

Published: Friday November 28, 2008

Despite a faltering global economy and inflation woes on the domestic front, Scotiabank Trinidad and Tobago Limited and its subsidiaries have raked in an after tax profit of $431.8 million for the year ended October 31, 2008, the bank said in a statement yesterday.

The company has made 16.4 per cent more profit than last year, the statement added. Every shareholder got $2.44 cents Earnings Per Share (EPS) for the year thus far.

This year marks Scotia's sixteenth consecutive year of record profitability.

The rate of return on shareholders' equity for the bank's common shares was on par with the previous year, while the Return on Assets (ROA) dipped slightly from 3.58 per cent to 3.45 per cent.

An indicator of how profitable a company is relative to its total assets.Â

Scotiabank's Managing Director, Richard Young, attributed the group's growth to their drive to sustain revenue growth, wise management of Scotia's capital and good leadership skills.

Based on the group's performance, the Board of Directors approved an interim dividend of 25 cents, making a total dividend of 96 cents per share for the year.

According to the website investorwords.com, a dividend is a taxable payment declared by a company's board of directors and given to its shareholders out of the company's current or retained earnings, usually quarterly.


Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business?id=161406846