Durrant Pate/Contributor

Trinidad-based conglomerate, Massy Holdings has seen a 10 per cent increase to its gas portfolio profitability owing partly to its acquisition of Jamaican-based Industrial Gases Limited (IGL), which was completed last year.

IGL is a distributor of cooking gas and the manufacturer and distributor of industrial and medical gases. While the pre-tax profitability for Massy’s gas portfolio is up 10 per cent, the news is even better for its third-party revenue, which is up 33 per cent. 

Company chairman Robert Riley is reporting that “This growth was driven by strategic acquisitions in Jamaica and enhanced operations in Guyana and Trinidad, partially offset by a conservative provision for a significant customer’s aged receivable, taken in FY2023 and Q2 2024.“

The strategic acquisition referenced here is IGL, which was bought for US$140.3 million, which was the agreed price on December 19, 2022, when Massy got the green light for the acquisition.

In terms of its ‘Integrated Retail Portfolio’, profit before tax improved by seven per cent year-over-year to TT$463 million (US$69 million). Third-party revenue rose 10 per cent to TT$7.4 billion (US$1.1 billion).

This was due to continued growth in our core market and our US acquisition of Rowe’s IGA. However, increases in operational costs and logistical challenges in Barbados and Trinidad moderated these gains. 

Comprehensive financial highlights

The financial results for the third quarter ended June 2024 indicate significant improvements in the group’s performance, particularly when compared to the exceptional FY2023. Revenue has shown strong growth with a 13 per cent increase in third-party revenue moving from TT$10.3 billion (US$1.5 billion) in Q3 FY2023 to TT$11.7 billion (US$1.7 billion) for the quarter under review.

While the pre-tax profit for the combined three quarters is down four per cent over 2023 moving from TT$760 million (US$113 million) in Q3 FY2023 to TT$731 million (US$109 million) in Q3 FY2024.

EBITDA, which measures the performance of the core businesses, increased eight per cent from TT$1.2 billion (US$174 million) to TT$1.3 billion (US$188 million). 

Despite higher interest expenses for acquisition financing, a one-time accounts receivable adjustment in Q2, and restructuring and legal costs, the Trinbagonian-based conglomerate has seen a significant year-over-year improvement in cash generated from operations. 

‘Cash Conversion’ improved significantly by 18 per cent, resulting in ‘Cash Flow from Operating Activities’ increasing 3.4 times from TT$189 million to TT$640 million. The ‘Motors and Machines Portfolio’ saw third-party revenue climbing by 11 per cent to TT$2.5 billion (US$373 million). 

However, pre-tax profit was stable compared to prior year, due to macroeconomic challenges in Colombia and financing constraints in Guyana.

Massy is currently finalising agreements to bring third-party funding to customers in Guyana, which should support future growth. 

Strategic roadmap to 2030 

The Group, which has operations throughout the region has established a comprehensive financial framework for its2030 strategy, focusing on sustainable growth and increased shareholder returns. Massy’s, “currency resilience strategy” aims to protect shareholders from currency fluctuations over the medium and long term.

The intended outcomes of the 2030 strategy include dividend growth; disciplined mergers and acquisitions (M&A); improved profitability and cash flow through expense management and revenue growth; and a to maintain historically conservative debt-to-equity levels.