THE National Enterprises Limited (NEL) has reported a substantial $327.5 million net loss for the year ended March 31, in stark contrast to the net profit of $12.5 million recorded the previous fiscal year. It also reported paying $96 million in dividends for the year and retained $677.7 million in earnings as at March 31.
The figures were discussed by the board and stakeholders during NEL's annual general meeting at Radisson Hotel, Port of Spain last Thursday.
NEL, in its annual report, said that the major difference year-over-year is occasioned by net decline in the value subsidiaries (51 per cent-plus ownership) of $133.6 million or 20.1 per cent and decline in the value of joint ventures and associated companies of $200 million or 11.4 per cent.
"The TSTT," management noted in the report, "was largely accountable for the decline in the subsidiaries category and NGC NGL Company Ltd in the joint ventures and associated companies group."
At the same time, it added, decline in revenues in the energy sector particularly related to a decline in commodity prices and a cautious approach to cash flow management in the case of other investee companies, resulted in a decline in divided income by $74.6 million or 75.8 per cent.
"NEL's concentration of investment in the energy sector has changed its fortunes. At the time that the sector was at its peak, NEL was formed to give individual investors the opportunity to participate in these fortunes.
"As the tables turn, the focus in this sector has resulted in a change n the investment horizon for NEL's shares. Thus, NEL must look to diversification of its investment portfolio to climb out of what has become the muddy pond of Energy Sector focus." In its outlook, NEL lamented that the energy sector assets are uncertain and guarded.
"That," it wrote, "combined with the overall economic impact of the covid19 pandemic, makes for a cautious approach to the forecast of the performance of our current investment portfolio. Notwithstanding this, we will undertake a more active and focussed approach to the 'reset, renew and rebirth,' of our strategic direction.
"With planned transformation and a patient understanding of market recovery, NEL will move steadily to the re-establishment of its mandate in providing dividend income payout based on its receipt of returns."
NEL chairman Ingrid Lashley said in her statement, "Diversification is inimical to the company's long-term strategic direction. An investment strategy that is defined in variety and well-placed interconnectivity of the investment portfolio will allow for softening of the impact of industry-related troughs and highs and ensure that the overall return to our shareholder is consistent in its regularity and increasing in its value."
NEL holds shares in National Flour Mills, NGC NGL Co Ltd, NEL Power Holdings Ltd, Pan West Engineers and Constructors LLC, NGC LNG, Trinidad Nitrogen Company and TSTT.