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Local film makers willing to sign over rights to their movies to local cable company Flow (Columbus Communications), can begin reaping financial rewards almost immediately says the company’s managing director Brian Collins.
In an interview with the T&T Guardian at Wednesday’s launch of the tenth Annual T&T Film Festival (ttff) at the Hyatt Regency in Port-of-Spain, Collins said: “If they give us the rights to it, we will actually show it in our other markets. We are currently in eight markets in the Caribbean.
“Our goal would be that all local movies have the ability to be shown in T&T and watched by all of our customers, and up the islands. That would be our dream. That is what we want to do and that avenue is there for them to do it. They hopefully will embrace the deal for what it is and move forward to see that it is a viable alternative than just going through the traditional movie theatres. There are other avenues to do this.”
Collins added: “Since our start with the Film Festival, eight years now, we offered producers and directors of movies the ability to show their movies via our Video On Demand (VOD) platform. So effectively, they have that. We have always said that it was available. All monies raised from that—that we take from our customers—will be passed on, 100 per cent of it to the producers.”
He also announced his company’s plans to expand its support of the festival by introducing an Amateur Film Award which will be an incubator where newcomers to the film industry will be paired with more experienced practitioners to produce works for the 2016 edition of the festival. Under the plan, 12 emerging film makers will be chosen.
“They will be paired with a local film producers and directors to give them the necessary guidance to bring their ideas into life. We will supply them with the equipment and then it will be aired at the Film Festival next year and people will be able to chose which one is the best. I think it’s a very exciting idea and it brings film making outside of the university and professional film industry into the community and we are really excited about it,” Collins said.
“We are eight years into a ten-year sponsorship. We hope to do another five-year sponsorship in two years’ time. We see this as a long term plan and we have invested a lot of money in this festival. I would say $8 million. Again, it just shows our commitment to local production, local artistes, local actors, local movie makers that Flow is here to support them through the Festival and where we can and where we think it appropriate to support them directly, as well.”
Collins praised the decision by the ttff organising committee to create a database where films can be archived and categorised.
“It’s a really good idea. A lot of times people don’t necessarily know where to go and get these Caribbean movies. With a centralised database that’s been both archived and categorised, it makes it easier to pick out what you want to watch, with the power of when you wanted to watch it. We are going to try and collaborate with Bruce Paddington, festival founder, and his team and make sure that we spread this as far and wide and shout from the rafters if we possibly can, because we are very excited about this.”
From the inception of the company’s partnership with the ttff, said Collins, Flow has worked to understand the vision and passion of the organiser. Once their passion became clear, the company entered into a five-year sponsorship deal which allowed them “to go off and plan way in advance and set things in motion.”
“That, I think, has allowed the Film Festival to accelerate in its growth over this period of time to become the premier film festival in the region and to be one of the most recognised around the world. We are just here to support them. They have the vision. They understand the industry better than we will ever do. Our job is to make sure that they have the financial support and where need be for the business support and the technology support to elevate this even further,” he said.
Overall market activity resulted from trading in four securities of which one advanced, one declined and two traded firm.
Trading activity on the First Tier Market registered a volume of 15,240 shares crossing the floor of the Exchange valued at $227,435.89. Scotia Investments Jamaica Limited was the volume leader with 11,770 shares changing hands for a value of $18,832, followed by Massy Holdings Limited with a volume of 3,170 shares being traded for $198,103.89. First Citizens Bank Limited contributed 300 shares with a value of $10,500.
Scotia Investments Jamaica Limited enjoyed the day’s sole price increase, climbing $0.07 to end the day at $1.60. Conversely, Clico Investment Fund suffered the day’s sole decline, falling $0.01 to end the day at $22.51.
Clico Investment Fund was the only active security on the Mutual Fund Market, posting a volume of 16,700 shares valued at $375,917.
Scotiabank T&T Limited recorded an increase of $27 million in its net income for the nine months ended July 31. Financial results just released by the bank shows net income of $417 million which is seven per cent higher than the figure for the comparative period in 2014. Total assets ended the period at $21.8 billion representing growth of $1.6 billion or 8 per cent compared to the previous year. Earnings per share (EPS) grew to 236.3 cents and return on equity (ROE) increased to 15.51 per cent.
The bank’s balance sheet shows that total assets were $21.8 billion as at July 31—8 per cent or $1.6 billion more than the comparative period in 2014. Loans to customers, the bank’s largest asset category, closed the period at $13 billion an increase of $1.5 billion or 13 per cent compared to 2014.
Treasury bills holdings totalled $1.8 billion, down by $305 million from 2014. Investment Securities grew by $859 million or 60 per cent as the bank moved to redeploy funds to higher yielding short to medium term instruments. Scotiabank said this was part of its active liquidity management strategies employed in the current economic environment. Total liabilities grew to $18 billion, up $1.4 billion or 8 per cent when compared to 2014.
“Customer deposits was the major driver of this growth, increasing by $1.8 billion or 12 per cent to close the period at $16.7 billion, as our customers continue to invest with confidence in the bank.
“In February 2015, Scotiabank made an early repayment of a $618 million debt security. This repayment has positively contributed to our net interest margin in the third quarter and will continue to do so for the remainder of 2015 and beyond.”
The insurance segment continues to be an important pillar within the group, contributing 20 per cent to Scotiabank’s total profitability. In commenting on the results, Anya Schnoor, managing director said: “We are pleased to announce that Scotiabank has concluded yet another successful quarter.
Our commendable third quarter results reflect consistent growth across all business lines and the continued focus placed on deepening our relationship with our customers and growing market share.
“Total loans grew by $1.5 billion or 13 per cent year over year coupled with an increase in deposits by $1.8 billion or 12 per cent; confirming the continued confidence that our customers place in us. Schnoor said the economic environment continues to be challenging with lower energy prices, noting that while liquidity has tightened in recent months, surplus liquidity remains.
She saud during the quarter the Central Bank increased the repo rate to 4.25 per cent. “We continue to closely monitor market dynamics and remain confident in our proven ability to manage through periods of economic uncertainty,” she said.
Local information technology (IT) and business consulting company, Caribbean TECH TrendZ Ltd (CTTL) took the coveted title of Microsoft T&T, Country Partner of the Year Award. This award solidifies CTTL as a world-class provider of Microsoft products and services.
The Gasparillo-based company joins 110 other Country Partner of the Year awardees, chosen from over 2,300 global nominations. CTTL CEO, Donny Ramdathsingh, received his award during a ceremony at the 2015 Microsoft Worldwide Partner Conference in Orlando, Florida. For Ramdathsingh, Microsoft’s recognition was a significant validation of his company’s efforts.
“We were very excited to be honoured with this prestigious award from Microsoft, this validates our success in supporting our customers with best-in-class solutions and exceptional customer service,” he said. “With the rise of third platform, customers are embracing new technology from Microsoft to gain new business growth and innovation. Caribbean TECH TrendZ Ltd is honoured to provide leadership in this new business paradigm to our customers.”
Ramdathsingh, as well as his World Partner of the Year peers, were lauded on the main stage at the conference for their exceptional accomplishments. As part of his winner’s experience, Ramdathsingh also received an invitation to a special 2015 Executive Award Winners Luncheon with Microsoft CEO Satya Nadella and Phil Sorgen, corporate vice president of Microsoft Corporation’s Worldwide Partner Group.
According to Microsoft, CTTL was selected for its example of excellence as a progressive partner, making note of its achievement as Microsoft’s top cloud reach partner in 2015.
In a statement, Microsoft described CTTL as, “a great transformation partner. Originally a training and core infrastructure partner in 2012, they have evolved over the last three years to build a strong services practice.
“They are a 100 per cent Microsoft shop, focusing deeply on Microsoft technologies and they’ve embraced wholeheartedly the move to the cloud. In FY15, CTTL has been Microsoft’s top cloud reach partner and has developed a world class, security camera cloud DVR solution built on Windows Azure cloud.
This is a true cloud profitability testament that deserves this award.” Frances Correia, country manager, Microsoft T&T, Eastern and Southern Caribbean congratulated CTTL on its achievement.
“We are honoured to recognise Caribbean TECH TrendZ Ltd as the Microsoft Country Partner of the Year in Trinidad and Tobago. Caribbean TECH TrendZ Ltd’s dedication to providing outstanding value for our mutual customers is a prime example of the excellence we see in our talented community of Microsoft partners.”
Government hopes to strategically position T&T as a centre of development of the region’s aviation industry. This was revealed yesterday at the official launch of the University of T&T’s (UTT) Aviation Campus at Camden, Couva. Tertiary Education Minister Fazal Karim, who spoke at the launch, said the airstrip at Camden could become the regional airport in the future.
“A needs analysis was done in 2011 both by UTT and the National Training Agency which revealed a limited pool of human resources for both training and industry expansion in the local aviation industry, particularly in the field of aviation maintenance. Training opportunities will be provided to citizens to provide programmes in aviation. There are also shortages in occupational fields like pilots and maintenance engineers,” he said.
Karim said talks are taking place with Boeing in Seattle on possible collaborations at the newly opened training facility. “Today we have levelled a platform for citizens who are keen on getting an education. Education and training is the passport from poverty to prosperity,” he said. Rudranath Indarsingh, Minister of State in the Ministry of Finance, said aviation industry is important to &T and global economy as it “plays a critical role in moving the human being, in moving goods and services, in moving cultures.”
“It has tremendous economic importance to the country’s growth and development. “We must see the aviation institute and runway as part of the continued development of T&T. Whether there is a natural disaster or a terrorist issue at the Piarco International Airport, this runway can be utilised to bring stability,” he said.
In August 2014 Cabinet approved $41.6 million for construction of the first phase of the campus, including construction of classrooms with flight device training facilities, ancillary facilities, outfitting and consultancy services. Programmes offered will include certificate in aviation theory, diploma in aviation technology with specialisation in air frames, engines and avionics, a bachelor of science degree in aviation technology, airframes, engines and aviation licences.
The two other phases of construction will include laboratories, specialised learning spaces, a hangar facility and workshop.
Independent energy company Trinity yesterday announced that as part of the ongoing review process it is divesting a non-core asset. Oilbelt Services Limited, a fully owned subsidiary of Trinity, has signed a sale and purchase agreement to sell the company’s 100 per cent interest in the Gaupo-1 block to New Horizon Exploration T&T Unlimited for a cash consideration of US$2.8 million. The proceeds of the transaction will be used to reduce Trinity’s senior secured debt facility.
The US$2.8 million consideration comprises a US$1.5 million deposit on the execution of the sales and purchase agreement—which has been received and is being held in escrow—with the remaining US$1.3 million payable on completion.
The transaction is subject to standard regulatory approvals, including final approval from Petrotrin and the Ministry of Energy and Energy Affairs and is conditional on approval by Trinity shareholders. As soon as practicable, Trinity intends to issue a shareholder circular and form of proxy to shareholders convening an extraordinary general meeting.
Block GU-1 includes 154 wells operated by Trinity of which nine are currently producing, an average of approximately 79 barrels of oil per day (bopd) year to date (2014 average: 121 bopd). The carried book value of the Block GU-1 asset as at July 31 was US$2.2 million.
Trinity CEO Joel “Monty” Pemberton, said: ‘The formal sales process that Trinity entered into in April has illustrated that even in difficult markets Trinity’s portfolio remains highly attractive. Trinity is continuing with the formal sales process, which remains competitive with discussions ongoing with several interested parties.
“The company looks forward to announcing additional news on the strategic review and formal sales process in due course.
The focus continues to increase operational efficiencies by optimising well performance and continuing cost efficiencies thereby ensuring the business remains sustainable and positioned for growth in a low price oil environment.”
Yesterday’s announcement comes on the heels of the decision of the company to lay off 22 employees “to ensure that the business remains sustainable, and can survive in a low oil price environment from a cash flow perspective.”
Trinity said in a statement on the lay offs: “We have relentlessly demonstrated our commitment to the sustainable development of our local talent and resources, and this is why, even as a London listed publicly traded company, we ensured that 98 per cent of our staff were Trinbagonians. Our vision of building a world class hydrocarbon producer right here at home has always driven our decisions, and our focus on staff development remains an integral part of this."
Prime Minister Kamla Persad-Bissessar yesterday said that investor confidence in T&T is intact, with major energy companies expressing their commitment to strengthening their ties with the country.
In the feature address at the sod turning ceremony for the $6.3 billion Caribbean Gas Chemical Ltd (CGCL) plant at the Union Industrial Estate, La Brea, she said the country’s investment climate is considered to be “consistently strong” and pointed out that the second largest investment in the country under her tenure, the $7.5 billion Solomon Hochoy Highway extension project, takes the top spot.
“In the last four years confidence in our economy and the energy sector has been expressed by major international players, including BP, BG, BHP and Shell. Last April, the CEO of Royal Dutch Shell visited this country after the historic acquisition of BG Group and said that Shell was committed to deepening and growing its position in this country based on the investment climate which he saw as being very consistent and very strong.
“It is this very consistent and very strong investment climate that has attracted these companies from Japan. Japan is the world’s third largest economy and a world leader in technology. T&T can therefore only benefit from this relationship with the Japanese companies here today,” Persad-Bissessar said.
“Most significantly, it will mark the genesis of a new industrial estate which is already complimented by the presence next door of the TGU power plant. The decision by the three Japanese companies here today—Mitsubishi Corporation, Mitsubishi Gas Chemicals and Mitsubishi Heavy Industries—to make this large investment in a country on the other side of the world is a testament to the confidence that these companies have in this country.”
Persad-Bissessar said the project will create 2000 jobs at peak construction and will benefit local contractors and energy service companies. Upon completion, it will permanently employ 180 workers in high paying positions.
She said labour, lease rentals, port charges, sale of water and electricity for the project will generate $2.2 billion for the local economy while foreign exchange earnings in the first 15 years are estimated at US $4 billion. She said additional revenue will be earned through the sale of natural gas to the project, corporation tax and dividends that will be paid to NGC.
Finance Minister Larry Howai said the project is the third chapter in T&T’s natural gas based industrialisation, following development of Point Lisas in the mid 1970s and the Atlantic natural gas plant in the mid 1990s. He said despite the global energy crisis, T&T has been continuously attracting foreign direct investments, which are expected to double by 2017.
About the project
When completed, the CGCL facility will convert natural gas to petrochemicals for production of methanol and dimethyl-ether.
It is being built by a consortium of companies, including the Mitsubishi Corporation, Mitsubishi Gas Chemicals, Massy Holdings Ltd and Integrated Chemical Company Ltd (ICCL) and the National Gas Company.
The project stemmed from the 2012 visit by Japanese Prime Minister Shinzo Abe and the officials from the Mitsubishi Corporation and is being financed by the Japan Bank for International Cooperation (JBIC) and the Bank of Tokyo-Mitsubishi UFJ, that country’s largest bank.
Food Production Minister, Devant Maharaj, says he is all in favour of pooled regional resources to meet the food needs of the Caribbean, but is concerned about “who is eventually going to foot the bill.”
The minister was asked by T&T Guardian to respond to a recent appeal by the Permanent Secretary in the Ministry of Agriculture, Food, Fisheries and Water Resource Management of Barbados, Esworth Reid, for the region to pull together financial and other resources to secure the future of the fisheries industry while also pursuing an “open seas” arrangement.
Reid said at the opening of a regional food security meeting for the fisheries sector that “sustainable growth in this important sector and the ability for governments in the region to fully and effectively tap into the significant potential benefits associated with it... requires that there be a regional approach to the sector by way of joint efforts among stakeholder member states to drive the sector forward.”
He also proposed a scenario within which there was not only harmonised legislation but “going after the benefits associated with economies of scale through large-scale production when fishing and fish processing become a regional joint venture rather than a national venture characterised by fragmented micro-business.”
“I believe that the time has come where the countries in the region can come together as an integrated economic space and agree to institute a policy of open sea resources to all members of the region,” Reid said.
“This can be done without compromising the sovereign rights of the individual member states, especially their rights to the resources in the sea that immediately surrounds them.”
Maharaj however warned that such a proposal would need to be discussed at the level of the Caribbean Community (Caricom) heads since, “It cannot be a case where everybody will just jump on board” following a suggestion by one of the region’s 15 member states.
Reid had however been clear that, “It is my opinion and it is just my opinion and does not reflect the opinion of the ministry and that of the minister that as a region, we should allow legitimate fishermen to operate their legitimately registered vessels, without hindrance, anywhere in the Caribbean.”
This, he said would be “subject to (a) set of rules and a set fee or levy paid either to the member state in which waters the vessel is operating or to a central regional body agency established by Caricom.
“The proceeds from the fees and levies collected by this agency can then be divided and distributed among the member states based on an agreed formula by the member states involved,” Reid said.
Maharaj said this was “a great idea” but that he was “looking forward to Barbados taking the lead with it.”
Declining oil prices has impacted on the operations of one of the independent companies operating in the local energy sector. Trinity has laid off 23 employees and in a statement the company said the move was necessary to ensure it can survive in a low oil price environment.
The move comes just days after Joel “Monty” Pemberton, CEO of Trinity, commenting on the company’s half-year financial results, said that the “current oil price environment and country specific fiscal regime has been difficult for companies in Trinidad to weather.”
He noted, however, that with oil prices below US$50 a barrel, Trinity does not pay supplemental petroleum taxes (SPT). Pemberton said the company welcomes recent indications by Energy Minister Kevin Ramnarine that the price under which SPT becomes zero per cent may be raised to as high as US$80 a barrel.
“In conjunction with an inventory of works this provides Trinity with a portfolio of highly attractive, producing assets with good visibility on the upside potential which could be delivered when new capital can be redeployed,” he said.
“We have continued a programme of cost-cutting, reducing G&A by 45 per cent year-on-year. However, in spite of these actions Trinity is unable to develop and capitalise on its portfolio organically and hence on April 8 announced a strategic review and formal sales process. This process has led to detailed discussions with a number of interested parties and we are encouraged by the progress made to date.”
For the second quarter, Trinity’s net production averaged 2,939 barrels of oil per day (boepd), an average of 3,085 boepd for the first half of 2015.
The company’s ability to fund re-investment from internally-generated cash flow has been impacted by further weakness in the oil price. With no further capital investment beyond maintenance spend in 2015, full year average production is expected to be between 2,700–3,000 boepd.
The company’s statement noted an inventory of drilling locations, recompletions and workovers that could significantly enhance production levels on the deployment of capital.
“Decline rates within Trinity’s portfolio are typically relatively low, the main issue is the level of drilling, investment and pump control, with decline rates heavily influenced by pump reliability which is a core area of focus for Trinity,” the company said.
The report continued: “Whilst revenues were adversely affected from low oil prices during the first half of 2015, with an average West Texas Intermediate (WTI) realised price of US$49.5/bbl, the impact at an operating level was somewhat negated due to the SPT structure which is charged against top-line revenues. At WTI oil prices below US$50.0/bbl no SPT is payable.
The company’s capital spending for the year is still on track to be in the range of US$2.5 million and will be focused on minimising declines in base production levels and maintaining operations.
The aim is to protect all of the company’s assets, while maintaining its future development programme and ensuring positive operational cashflow at low oil prices.
MANCHESTER, NH—Xeros, the innovator of an ultra-low water laundry system, announced that it has expanded its market presence into the Caribbean and Latin American hospitality, dry cleaning and commercial laundry markets with Xeros’ channel partner Worldwide Laundry, Inc Under the agreement Worldwide Laundry will sell and service Xeros’ award-winning polymer bead cleaning laundry systems which are proven to dramatically reduce water, energy and detergent consumption.
Worldwide Laundry, Inc is a full service laundry equipment, parts and supplies company with 40 years of combined experience in the distribution of on-premise, coin laundry, dry-cleaning equipment at competitive prices worldwide. Worldwide Laundry will be facilitating delivery of the Xeros solution to the broader Caribbean and Latin American markets.
Although Latin America is reported to have the most annual rainfall in the world, geography, pollution and social inequality create water scarcity issues across the region.
The Caribbean islands are some of the most vulnerable countries in the world to water shortages. The impact of climate change is expected to significantly raise the sea level, increase salt-water intrusion, flooding and hurricanes, and decrease rainfall. Today, the islands are experiencing the worst drought conditions in 5 years.
Puerto Rico, St Lucia, and Cuba are all experiencing severe drought conditions and have implemented strict water conservation restrictions. In addition, according to Caribbean Development Bank (CDB), Caribbean electricity costs are sky high with tariffs ranging between US $0.30 cents and US $0.40 cents per kilowatt hour (kWh).
These rates are approximately four times the average rate in North America. (Marketwired)
T&T remains the largest regional source market of visitors to Barbados, although statistics are showing a steady decline in T&T to Barbados travel over the past three years.
Vicky Chandler, director for Caribbean and Latin American Region at Barbados Tourism Marketing Inc, said since 2012, travel has been dipping. Experts in Barbados say this is due to the slump in the global economy. Still, figures tabulated for international travellers placed T&T as the island’s fourth largest source market.
In a T&T Guardian interview, Chandler said the Crop Over Festival was still a major draw for T&T nationals travelling to Barbados. “In 2014, Crop Over generated BDS$96 million. Unfortunately, the Trinidad expenditure numbers are captured under the Caricom head count. However, in 2014, Caricom nationals spent on average USD$181.84, ranking them as higher spenders on average than visitors from the United States and Canada for that period,” she said.
“This year, like the past several years, we have seen an increase in the synergies and collaborations between private sector Barbadian companies and T&T companies, as well as our linkages between our culture ministry and your ministry of the Arts and Multiculturalism.”
While interest in travel to Barbados usually spikes at the end of July—the end of Crop Over with Grand Kadooment—Chandler insisted that festival was more than just the Carnival. She explaineed that the Carnival aspect is a much larger event which spans three months and focuses on history and heritage.
“When it comes to the party element and the actual Carnival the bonds are closer. We have lots of companies from Barbados that are involved in events at Carnival (in T&T) and likewise I believe there are several T&T companies that are involved in our Crop Over Festival. At the end of the day, we cannot be static with what we do. You may as well lie down and die! Everything has to evolve and we look at the synergies and maximize the positives in it all.”
She added: “I think the synergies will continue to grow and the collaborations whether it is our musicians being part of your Carnival. We had Machel (Montano) here leading an entire section in a mas band. There is nothing wrong with it. It’s a natural evolution of how people interrelate and play together. Because of the entrepreneurial spirit in your country, which is great, T&T has a huge presence in Barbados when it comes to commercial stuff, so this is just another aspect of that.”
Chandler said the partnerships are good for the region and expressed surprise it didn’t happen sooner. “If it is working, then there is a reason for that. There is a demand for it. It will reach the point naturally when it is enough or it has to evolve again. T&T is the number one market for visitors to Barbados regionally,” she said.
The entry into the local insurance market of Suriname-based Assuria Group and Jamaica’s Insurance Company of the West Indies (ICWI) does not pose a threat to current market leader Guardian Life of the Caribbean, says its president Anand Pascal.
“I think what you are seeing is a phenomenon where these entities come from some of the other islands and look to T&T as a very strong market. So if you want to be significant and influential in any particular space, T&T is where you have to be. I don’t view any entry as a negative thing. It’s only positive and could only strengthen the entire market.
“It’s well known that within the insurance sector in particular, as a market, we are still heavily under-insured. If you look at general statistics that are used worldwide, there is significant room for growth within the market, because a wide cross section of the population still don’t necessarily understand the risks and the need for insurance,” he said.
“So there is still room to grow for all parties. I don’t really see it as a significant threat, because of our operations, our position in the market. We are well prepared to address any concerns that might be raised by competition, but we welcome competition.”
Pascal said it was no secret that the economy has slowed somewhat from the highs witnessed a few years ago, especially taking into account the different financial issues around the world, particular falling energy prices and their obvious impact on the local environment. He said within the financial services sector, he said, insurance seems to be somewhat immune to some of these shocks.
“What insurance does is, it protects needs and protects financial needs. Some of those needs actually get exacerbated when times get tougher. Our field force are very well aligned to the mission of how we go about addressing those needs and identifying and raising those issues with our clients. That seems to be working quite well for us at this time,” said Pascal.
Asked to address the failure of Parliament to pass new legislation to guide the industry, he expressed concern that the modern insurance sector is being guided by 40-year old legislation. “This (new) Bill has been in the environment for some time. There have been discussions between the regulator, (the) industry, difference stakeholders in the industry and I have to say that I am a little disappointed that it didn’t get past the Parliament stage, before Parliament was prorogued.
“The Bill is something that I think the industry is ready for. Certainly, the Guardian Group is ready for it,” he said. Pascal added: “It’s a more modern piece of legislation compared to what we currently operate under. We operate under the Insurance Act of 1974, so it’s a very dated piece of legislation, written in an almost different time.
“The upgrades that we get from the new Bill, I think, will serve the market well in terms of things like corporate governance, adequate capital, (and) insolvency. It can only redound to the benefit of the industry as a whole and strengthen the insurance sector, as well as the financial services sector of the economy.”
BRIDGETOWN, Barbados,—CIBC FirstCaribbean has released its results for the third quarter of this fiscal 2015, recording its highest quarterly net income since the second quarter of fiscal 2010.
The bank delivered solid results against its strategic objectives of accelerating profitable revenue growth and improving operational efficiency by recording net income of $34.8 million in the third quarter, up $11.4 million or 49 per cent over the prior year’s third quarter net income of $23.4 million.
For the nine month period ended July 31, net income was $87.0 million, up $31.9 million or 58 per cent over prior year’s adjusted net income of $55.1 million for the same period.
Total revenue during the third quarter of fiscal 2015 increased by $7.1 million compared to the second quarter of fiscal 2015. Total revenue over the nine month period was down $7.9 million year over year primarily due to lower interest earnings from loans and securities. Some countries continue to experience low credit demand, additionally interest margins on loans and securities yields were lower.
While productive loans balances are down slightly over the prior year, an improved performance over the second quarter of 2015 was recorded with $80.6 million in loan growth as a larger proportion of the sales pipeline was converted into productive loans during the latter half of this quarter. Operating expenses over the nine month period were down by $3.0 million compared with the same period last year as FirstCaribbean continues to benefit from expense control initiatives and savings from its restructuring programme.
Loan loss impairment expense was significantly lower by $43.1 million compared with the prior period’s adjusted expense of $77.9 million due to an improvement in the loss experience and recovery activity. Additionally, non-productive loan balances were down 18 per cent to $651 million compared with the same period last year as efforts continue to further strengthen the quality of our loan portfolio.
CIBC FirstCaribbean continues to make a number of investments across the region pursuing its growth objectives while also demonstrating its continuing commitment to the Caribbean.
Cutting subsidies on oil and gas cannot be avoided if T&T is to reduce its expenditure to cope with declines in global markets, Mariano Brown, former Minister in the Ministry of Finance said yesterday.
“The real difficulty is not premium (gas). In fact, premium at this moment needs a reduction in price because it is probably trading at a price which is higher than the world price as we speak,” he told reporters yesterday on the sidelines of a Powerful Ladies of T&T (PLOTT) networking luncheon and roundtable discussion at the T&T Chamber’headquarters, Westmoorings.
Brown said the biggest issue with subsidies is in diesel and that’s the area that has to be addressed.
“There are serious implications. The issue is how you will do it, what are the things you will offset, what are the compensating measures. That’s why you can’t look at any one alternative. It has to be a package of measures, not one measure.”
Commenting on plans for a downward revision of the oil price on the national budget is pegged to US$40 a barrel, Brown said that would not make much of a difference.
“What is important is how much money is coming in and out and how it is going to be spent. In other words, what is our gross revenue likely to be and therefore how much money can we realistically spend?”
He added that there is going to have some level of borrowing and a decision about “what you are cutting.”
“Between now and October 30, it will be a very interesting period from a finance point of view,” he said.
On Tuesday, Prime Minister Kamla Persad-Bissessar said Government plan to revise the oil price from US$45 to US$40 a barrel.
Brown said the declining international markets as a result of stock volatility in China has already started to impact T&T's economy.
“The fall in China's demand internationally means that the prices of commodities are falling, it is just that it is coming back down to more normal levels. Unfortunately, we've gotten accustomed to prices at high levels which has fueled our economy and in a sense fueled our income. This is an adjustment period and the level of income is not likely to be as high as it were in the past.”
Continuous changes means that the Government of the day has to create dialogue so the population can get an appreciation of how it can affect them, he said, adding that there is not enough political will to get the dialogue moving.
Prime Minister Kamla Persad-Bissessar expects oil prices to stabilize soon despite its continuous slide over the last year.
“We are at a time when there are challenges. There have been challenges over the last several years, especially over the last six months with respect to our revenue streams from the oil and gas. We have been so dependent on the oil and gas sector for so long that we are subjected to external shocks.
“We are experiencing now the external shock of price shocks. However, we are fairly optimistic that that downward trend will stabilise,” she said.
Persad-Bissessar, who spoke yesterday at a discussion hosted by the T&T Manufacturers’ Association (TTMA) at the Arthur Lok Jack Graduate School of Business, Mt Hope, said prudent management of the economy is needed combat these problems.
“When we came to office in 2010, there were two black holes—the Clico debt and the Hindu Credit Union (HCU) debt—but we were able to stabilise that. During the last five years we have not had any major instability, whether it is in the economy or sociological ones.
“This inspite of all the marches and protest demonstrations, they never materialised. If people are comfortable they do not want to get involved in shutting down the country,” she said.
Even with low energy prices, she said, T&T can still boast of strong economic fundamentals.
“We have been able to keep a strong dollar. Our macro economic fundamentals are very strong. We have six months import cover, our gross domestic product (GDP) is also strong.
“While the macro economy is great the micro factors are also important to me and we manage to maintain social safety nets,” the prime minister said.
Persad-Bissessar also said that T&T has experienced high foreign direct investment (FDI) over the last five years with US$1.5 billion inflows annually since 2012.
Commenting on plans for the manufacturing sector, she said: “We see manufacturing as a very vital part of the T&T economy. Our intention is to double exports of locally manufactured goods and double the contribution to GDP by 2020.”
Meeting the stringent requirements of international food safety standards can make the difference between success and failure in the regional fisheries sector both as a generator of foreign exchange and as a provider of safe food for domestic consumption.
According to leading regional experts and industry players meeting in Barbados earlier this week, such issues are fast becoming matters related to the very survival of a food sub-sector already besieged by a variety of environmental and regulatory factors.
According to figures from the Seafood Industry Development Company (SIDC), made available to the meeting organised by the Caribbean Regional Fisheries Mechanism (CRFM), in T&T the industry represents ten per cent of total output in the agriculture sector amounting to .09 per cent of national GDP and rising.
However, though exports continue to rise, peaking at $80 million over the last recorded period, the country remains saddled with imports that exceed $60 million annually.
Regional experts, however, say that while there was a level of primary processing and packaging in the local industry, further processing to meet Sanitary and Phytosanitary Standards (SPS) would be required to “help close the gap.”
Similar situations arise throughout the Caribbean.
CRFM executive director, Milton Haughton told the meeting: “A very important challenge for us in the region at this time is how to optimise economic and social value of our fish and aquaculture production.”
“A key impediment is meeting international standards for SPS and seafood safety,” he said.
Experts say potentially lucrative European markets can go relatively untapped until regional processors take action to take advantage of markets now subject to free trade under the European Union’s Economic Partnership Agreement (EPA).
Haughton pointed to the fact that several Caribbean countries “have still not been able to fully surmount the challenges posed by the complex SPS requirements of the EU regulations and are thus effectively barred from exporting fish and seafood to the EU market.”
More than that, according to Ena Harvey, who heads the Barbados office of the Inter-American Institute for Cooperation on Agriculture (IICA), “we need to provide wholesome products for our populations as well as for the millions of long stay and cruise visitors and for whom the tourism experience includes a cuisine featuring seafood.”
She noted that “a high percentage of the seafood products we consume, is imported as frozen and salted fish.”
It was a point also made by Esworth Reid, permanent secretary in the Ministry of Agriculture, Food, Fisheries and Water Resource Management of Barbados.
“Despite the abundance of sea water that surrounds us and the high population of fish that may be in our waters, I have not yet seen or heard of a can of tuna or any other fish labelled ‘produced in Barbados’, ‘produced in Trinidad’ or produced by any other country of the region,” he noted.
“I believe that I would be correct to say that all of the canned fish consumed in the region is imported,” he added.
The assessment of the meeting which ended Tuesday was that the Caribbean was “at the very early stages of introducing a new regime for safe seafood for local and international consumption.”
The “SPS Measures” project discussed at the meeting, in Haughton’s view, was important to “help to create a solid foundation for our countries to improve trade capacity.”
This, he said, made it possible for the Caribbean “to take advantage of opportunities to expand export of fish and seafood, not just to Europe, but also to other markets, while at the same time ensure that imported and locally harvested fish are safe for our people to eat.”
The Association of T&T Table Egg Producers (TTTEP) is insisting a “terrible” local egg shortage has nothing to do with the bird flu crippling the US egg market at present. The group described the local egg shortage as unexpected but assured it is not caused by a health problem and is only temporary.
“Because of an unexpected decline in production there has been a major interruption in the normal supply of local eggs available nationwide,” a release from the TTTEP yesterday said. “But this situation is only temporary and will improve over the coming weeks.”
Vice-president Dennis Shawn Ramsingh said: “It is not the bird flu. This is as a result of a local issue that is still being investigated by all major stakeholders.”
Ramsingh said the shortage could be as a result of various problems and until they got back lab reports, they could not make definite pronouncements.
He said the association was certain the shortage was not the result of the bird flu since lab tests were done to determine this and the results were negative.
Describing the extent of the shortage, he said, normally, close to 500,000 chickens have a 75 per cent to 85 per cent egg production. Production has dropped to around 50 per cent, he said.
Ramsingh said producers wholesale eggs to supermarkets and restaurants. Consumers who see eggs as a cheap, healthy breakfast food are being affected, he said, and the association is now forced to import eggs from the region to alleviate the shortage.
“We don’t really import eggs unless there is a shortage and with the bird flu situation in the US we are trying to avoid importing eggs from there.”
Ramsingh said over the years, the local table egg industry had been one of the most reliable and stable sectors in the poultry industry, producing eggs at the lowest cost in the Caribbean region.
One year ago egg prices were being wholesaled for around $16 a dozen.
In July, the price jumped up by $1.25. The association claims this price was fixed for three years.
Eggs are now being wholesaled for between $17 and $18.50, depending on the size. Consumers say this translates in the supermarkets to close to $20 a dozen for large eggs.
Vivek Charran, president of the San Juan Business Association, yesterday commended Government for considering the option of pegging the budget on a US$40 a barrel oil price.
“The business community and anyone interested in the economy appreciates the honesty of the Government in recognising that there need to be changes in preparing for the budget in light of the falling oil prices,” he told the T&T Guardian.
Charran was reacting to Finance Minister Larry Howai’s announcement that a People’s Partnership (PP) government might base the upcoming budget on the lower oil price.
Howai, who spoke at a post Cabinet media briefing yesterday, said while the PP had based its manifesto plans on a US$45 per barrel oil price and US$2.25 per MMBTU gas price, with the drop in the oil price to US$38 a barrel this week he decided to revisit the number and computations will now be based on a US$40 oil price as well as a US$45 price.
“We are in the process of working out that and the effect it could have on our overall fiscal performance during the course of next year but we do have, again, one-off cash flows that will help us through the process of adjusting our overall fiscal position to the lower level of prices that are likely to prevail not only this year but the coming year but also perhaps over the medium term.
“It is not our expectation that prices will revert to the $100 barrel range but we do expect some level of recovery in prices,” Howai said.
The minister added: “Even if the projections of US$50 to US$54 continue to hold up, we will probably want to peg our budget at about US$45 to be on the safe side, so we will continue to manage and be very careful and very prudent about how we manage this process as we go forward. We have continued to build our cash reserves and certainly to ensure that we have a quotient to ensure that we could meet our commitments as we go forward.”
In response, Charran noted that oil prices are cyclical said and whoever forms the next government must be realistic rather than optimistic in planning the 2015/16 national budget.
“It is believed that the price of oil has reached rock bottom and it will not drop any further. After this it will go back up. Government must show prudence during these times,” he advised, adding that anything can happen as the global markets are uncertain.
“There are people who are being speculative and say by next Easter prices of oil can go back up to US$70 a barrel of oil. During an election the Government can say anything and say things will be better and be optimistic. But the Government is being realistic. As we get closer to the budget, the Government needs to look more in depth at the oil price and what to do,” he said.
Daphne Bartlett, president of the San Fernando Business Association, wants whoever forms the next Government to be conservative in how they plan the budget. She believes US$30 a barrel of oil would be the best price on which to base the budget.
“Citizens should not have expectations of greater expenditure spending. You cannot expect Dr. Keith Rowley or Prime Minister Kamla Persad-Bissessar to wave a magic wand and raise the barrel of oil to US$100 a barrel of oil again. The country has to be realistic,” she said.
Ballyram Maharaj, former president of the Supermarkets’s Association had said earlier this week that whoever forms the next government should consider pegging the budget at “thirty-something dollars a barrel.”
“When one hears about the proposals of US$45 a barrel of oil on which to base the budget, you realise there is a lot of work to be done,” he said.
The price of oil soared more than 10 per cent yesterday, its biggest one-day gain since March 2009, lifted by resurgent global stock markets and a report showing the US economy grew faster than previously reported in the second quarter.
West Texas Intermediate (WTI) crude, which trades slightly higher than the crudes produced in T&T, rose US$3.96, or 10.3 percent, to US$42.56 in New York—the biggest gain since March 12, 2009, when oil gained 11 per cent.
Oil had fallen to a 6 ½ year low because of a global supply glut and worries about the health of China’s economy. Analysts viewed yesterday’s gain as a reaction to the rebound in China’s main stock index, which rose the most in eight weeks, and don’t see anything pointing to a long-term rally in oil prices.
Overall market activity resulted from trading in 13 securities of which two advanced, seven declined and four traded firm.
Trading activity on the First Tier Market registered a volume of 371,433 shares crossing the floor of the Exchange valued at $2,908,307.75.
National Flour Mills Ltd was the volume leader with 251,646 shares changing hands for a value of $529,076.60, followed by Sagicor Financial Corporation with a volume of 30,421 shares being traded for $174,920.75. Massy Holdings Ltd contributed 25,499 shares with a value of $1,593,687.50, while JMMB Group Ltd added 22,490 shares valued at $9,823.70.
Guardian Holdings Ltd enjoyed the day’s largest gain, increasing $0.24 to end the day at $13.14. Conversely, One Caribbean Media Ltd suffered the day’s greatest loss, falling $0.31 to close at $22.00. Clico Investment Fund was the only active security on the Mutual Fund Market, posting a volume of 42,420 shares valued at $954,450. It declined by $0.01 to end at $22.50.
Professor Clement Sankat, pro-vice chancellor and campus principal at the University of the West Indies (UWI), St Augustine, said the newly opened Centre for Workforce Research and Development (CWRD) will be critically important in a time of stalled economic growth, high youth unemployment and increasing competition within the Caribbean.
“The CWRD will go a long way in helping us to become more prepared and better equipped to compete. It will also help individuals interested in retooling their skill set to better align their knowledge, training and services with our country’s human capital needs,” he said at the opening of the facility on Monday.
The CWRD will focus on harmonizing, standardizing and co-ordinating labour market research. It was conceptualised in 2008 in UWI’s Office of Research Development and Knowledge Transfer, then called the Business Development Office, as a means of creating a regional storehouse of labour market information producing labour market surveys, tracer studies of graduates, skills gap analysis and assessments of demographic and attitudinal profiles of the workforce, particularly as they relate to the movement of skilled people within the Caricom Single Market and Economy.
Tertiary Education Minister Fazal Karim said some of the key objectives of the facility are to “identify the developmental needs of the T&T economies and CSME, identify the size and location of the skills gap for the local and regional economies, ascertain the impact of the free movement of labour on the economies of T&T and CSME and identify the required levels of training for new economic sectors in the Trinidad and Tobago economy.”
He added: “I think one of the things this research would do is reduce the skills mismatch so that people who will have the data when they enter institutions in the tertiary sector, instead of not knowing what the job market holds. I often refer to them as the “graduate glut” or the discouraged graduate.”