National Enterprises Ltd (NEL) recorded a total comprehensive loss of $270 million for the year ended March 31, 2021. For the comparative period last year NEL recorded a loss of $527.5 million.
NEL recorded an operating profit of $28.2 million before considering the impact of the results of the fair value of our investee companies, chairman Ingrid Lashley stated in her report on the financials. This represented an increase of 9.3 per cent when compared to the results of $25.8 million for the previous fiscal year.
“NEL conducted a review of its investee companies, and the impact of that valuation has resulted in a year end loss of $270 million. This compares favourably with the reported loss of $327.5 million for the prior year. NEL’s portfolio of energy investee companies are operating in an industry undergoing rapid transformational change.
“The focus remains on investments in efficiency and innovation; market positioning for greater participation in the full value chain; and developing forward-looking collaborations/partnerships for competitive clean energy,” Lashley stated.
“The completion of negotiations in respect of the gas supply contract between Trinidad Nitrogen Ltd (Tringen) and the National Gas Company Ltd (NGC) promises a strong rebound for Tringen. Tringen has registered an increase in value of 50 per cent from fiscal year 2020’s valuation,” she stated.
Lashley said NEL’s other energy assets still face some challenges and uncertainty in the near term.
“Underpinned by the lower-than-expected forecasted sales of Phoenix Park Gas Processors Ltd (PPGPL), and the impairment of Atlantic LNG’s Train 1, there has been decline in the values of NGC LNG, NGC NGL and Pan West Engineers and Constructors LLC. The reduction in value of these companies account for the majority of the $270 million loss posted for fiscal 2021,” she stated.
Lashley said NEL’s performance this past fiscal year, reflects efforts to protect and preserve shareholder value amidst the general economic and market conditions associated with the extended COVID-19 pandemic and prevailing conditions of the global energy industry.
“Declining commodity prices and weak market recoveries in the energy sector have given way to rebounding in prices and projected upward market trends worldwide. We are operating with a sense of expectancy regarding the re-opening of the local economy pending a successful vaccination program,” she said.
Lashley said for fiscal 2021, NEL saw “strong performance” in our non-energy portfolio companies.
“National Flour Mills Ltd (NFM) has had an excellent year, increasing its value by 100 per cent. NEL Power Holdings Limited also completed the year with an increase of 34 per cent in value. While the Telecommunications Services (TSTT) has experienced 35 per cent reduction in value, the company has embarked on another reorganisation exercise, that when successfully implemented, is expected to yield significant profits going forward,” she stated.
Lashley said going forward in fiscal year 2022, NEL is committed to the restructuring of its portfolio of investee companies and will continue to take the decisive actions during this rebuilding process, to create the balance for increased income and value in its portfolio companies for both the short and mid-term.
“Our goal is to build with assets that can deliver consistent dividend income and increased valuation while creating the balance and space for the rationalisation and re-emergence currently underway in the local energy sector.
“The diversification of NEL’s investee portfolio will be instrumental to delivering transformative value to our shareholders in the middle to long term,” she stated.