Delivering sustainable growth and value creation for all stakeholders

May 15th, 2024


Chairman’s Statement for the Second Quarter of FY2024

The air supply plant showing the liquid nitrogen filling station in Guyana.
The air supply plant showing the liquid nitrogen filling station in Guyana.

We are pleased to share our financial performance for the first half of FY2024, which reflects both our challenges and successes. The Group has continued to grow, with a 15% increase in third-party revenue from TT$6,781 million (US$1,006 million) in HY FY2023 to TT$7,815 million (US$1,161 million) in HY FY2024. This growth is evident across all three portfolios, each achieving notable double-digit revenue increases.

Despite this revenue growth, our Profit Before Tax (PBT) and Profit After Tax (PAT) from continuing operations have decreased to TT$488 million (US$72 million) and TT$311 million (US$46 million), reductions of 7% and 13% respectively. The primary drivers were higher interest expenses due to historically low debt levels and a one-time adjustment for accounts receivable risks.

Excluding these one-off adjustments, our operational cash generation and PBT have remained consistent, matching last year’s exceptional growth performance. While each portfolio continues to be profitable and to generate cash, we have increased focus on operational efficiencies and cash generation to further enhance shareholder value.

Portfolio Performance Highlights:

  • Integrated Retail Portfolio (IRP): IRP’s PBT improved by 3% year-over-year to TT$316 million (US$47 million). Third-party revenue rose by 12% to TT$5,042 million (US$749 million). This strong growth in our core retail markets was dampened by increases in operational costs and logistical challenges in Barbados and Trinidad moderating these gains. Additionally, the absence of prior year’s one-time gains in Trinidad also affected the year-on-year earnings.
  • Gas Products Portfolio (GPP): GPP saw a significant 49% increase in core PBT, with third- party revenue up by 40% on HY 2023 to TT$1,056 million (US$157 million), driven by our strategic acquisitions in Jamaica, enhanced operations in Guyana and ongoing operations in Trinidad. A conservative provision for a major customer’s aged receivable partially offset these gains.
  • Motors and Machines Portfolio (MMP): MMP increased its third-party revenue by 10% to TT$1,618 million (US$240 million). However, PBT slightly decreased by about TT$11 million (US$1.6 million) due to operational and logistical challenges in Colombia and Guyana.
Staff in the air supply plant at the computer hub at Massy Gas Products at Guyana.
Staff in the air supply plant at the computer hub at Massy Gas Products at Guyana.
One of our employees at the Massy Gas Products plant located in Guyana.
One of our employees at the Massy Gas Products plant located in Guyana.

Strategic and Operational Adjustments:

We have decided to accelerate our transformation into an Investment Holdings Company (IHC), reviewing our structure, deployment of capabilities, governance and controls, and incentives across the Group. This further restructuring of our remaining legacy conglomerate structure aims to enhance accountability, agility and emphasis on sustainable growth and cash generation while improving controls on capital use, human resources and overhead. Further, our strategic reinvestment and divestiture initiatives are designed to refine our core capabilities and improve operational performance. We anticipate these strategies will fully materialise in the latter half of 2024 and early 2025. We are confident in our strategic direction and our focus now is on execution and performance.

Rowe’s IGA located in Jacksonville, Florida.
Rowe’s IGA located in Jacksonville, Florida

The Group’s Integrated Retail Portfolio experienced strong revenue growth for the year to date, as a result of the strength of the retail sector in all markets, and the successful acquisition of the Rowe’s IGA chain of supermarkets in Jacksonville, FL.

A member of staff at the bakery at Rowe’s IGA located in Jacksonville, Florida
A member of staff at the bakery at Rowe’s IGA located in Jacksonville, Florida.
A member of staff at the Rowe’s IGA located in Jacksonville, Florida.
Rowe’s IGA located in Jacksonville, Florida

Leadership Transition and Succession:

This period marks the beginning of significant leadership transition and succession to support and enable our strategy. We extend our gratitude to Gervase Warner for his dedication and welcome David Affonso as the new leader. With 35 years at Massy and a successful tenure leading the IRP, we are confident in his ability to guide us toward continued success through execution and performance delivery. David is committed to Massy’s leadership talent growth, deployment and succession, recognising that succession is a key enabler to sustainable growth.

Dividends:

Reflecting our solid performance in the first half, we are pleased to declare an interim dividend of 3.15 cents per share.

We thank you for your continued trust and support as all our 13,000 employees strive and lean in to deliver sustainable growth and value creation for all stakeholders.

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