Money Matters: Firstline Securities Blog


20 August 2015

Who are TTNGL?

Trinidad and Tobago NGL Limited (TTNGL) was incorporated in the Republic of Trinidad and Tobago on the 13th September 2013 and acts as an investment holding company following its acquisition of 39% of the share capital of Phoenix Park Gas Processors Limited (PPGPL) in the form of class B shares.
The PPGPL shares that were acquired by TTNGL were previously held by Trinidad and Tobago Holdings LLC, the sole shareholder of which was the National Gas Company of Trinidad and Tobago Limited (NGC).
TTNGL is currently a wholly owned subsidiary of NGC which is itself owned by the Government of the Republic of Trinidad and Tobago (GORTT).
Pursuant to a mandate issued by GORTT, NGC is on the verge of offering 49% of its total 39% ownership in PPGPL to investors in Trinidad and Tobago through a public offering of class B shares in TTNGL.
As at 31st December 2014 TTNGL’s investment in PPGPL represented 93% of the total net assets of TTNGL.
TTNGL prepare its accounts annually expressed in Trinidad and Tobago dollars.

Who are PPGPL?

PPGPL was incorporated in the Republic of Trinidad and Tobago in May 1989 and operates one of the largest gas processing facilities in the Americas.
From its plant located in the heart of Trinidad and Tobago’s petrochemical sector at Point Lisas PPGPL provides clean  natural gas of a high quality to its customers by processing wet natural gas.
Processing involves the extraction of natural gas liquids (NGL’s). Processed natural gas is delivered by PPGPL’s customers to downstream facilities that use it as a feedstock.
PPGPL  fractionates the extracted NGL’s into propane, butane, and natural gasoline. Both the propane and the butane are marketed in the Caribbean and Central America principally via Trafigura, and the natural gasoline is marketed internationally via Glencore.
PPGPL prepare its accounts annually expressed in United States dollars.

How TTNGL accounts for its investment in PPGPL

TTNGL has a 39% investment in PPGPL and accounts for this investment as a joint venture.
Effectively a joint venture is a joint arrangement whereby the parties involved in the venture have rights to the net assets of the joint arrangement depending upon the size of their shareholding relative to the total share capital issued and the size of the other shareholdings within the venture.
Since TTNGL does not exercise control over PPGPL (a shareholding of greater than 50% would be required to achieve control) TTNGL accounts for its investment in PPGPL using the equity method of accounting.

What is the equity method of accounting?

Under the equity method TTNGL begins as a baseline with the cost of its original investment in the PPGPL. Then in subsequent accounting periods TTNGL will recognise its share of the earnings or losses of PPGPL.
TTNGL recognises its share of PPGPL’s profits or losses as an adjustment to the value of its original investment as recorded on its balance sheet, and also in the in its income and expenditure account.
The share of the PPGPL’s earnings that TTNGL recognises is calculated based on TTNGL’s ownership percentage (39%) of the PPGPL’s ordinary shares.
When TTNGL calculates its share of the PPGPL’s earnings it has to take account of the dividends that it has already received from PPGPL. The dividends received are deducted from the carrying amount of TTNGL’s investment in PPGPL as recorded in the accounts of TTNGL.
The value of the investment in PPGPL recorded in the balance sheet of TTNGL has to be tested annually for impairment. Read more…


17 August 2015

In the week since the prospectus for TTNGL has been released, there has been intense discussion regarding the initial public offering, ranging from valuation concerns to questions about revenue and profitability, among others.

All of these concerns and questions are valid, and must be carefully considered by investors before arriving at an investment decision.

Firstline made a recommendation that TTNGL is an appealing investment for investors with capital allocated to take on additional moderate (and by extension, higher) risk, and who are prepared to weather some short term volatility and temporary downside in exchange for attractive dividends relative to other available options.

Therefore, if you have set aside $100 to invest in PPGPL under the assumption that it is a “safe” investment inoculated from global commodities prices fluctuations, then it may well be time to revisit the amount of money you initially planned to allocate and invest. The new amount might be $20 or $ 50 as opposed to $100. In other words:  the amount you allocate directly correlates with your risk tolerance, time horizon, existing portfolio composition and exposure, and ability to absorb any short term volatility.

Additionally, we are unlikely to see the immediate sharp pop up in values that we saw with FIRST. Nevertheless, this does not take away from some of the positives of TTNGL, which must also be considered along with the risks.

Profitability Outlook

MB Average 2014 and 2015 prices

Like most other energy related commodities, LPG (propane and butane) and gasoline have taken a beating in 2014 and 2015.
At Firstline we were only able to obtain market prices for PPGPL’s commodities from late February 2014 through August 14th 2015. Based on the average 2014 prices from the dataset, and the average 2015 prices year to date, there have been declines of between 42% and 52% in the prices of PPGPL commodities. Read more…


11 August 2015

Last June, based on publicly available information, we conducted a basic analysis and valuation of Phoenix Park Gas Processors Limited (“PPGPL”), which was slated to offer shares to the public later in the year. Over a year later, the initial public offering is officially underway as of 11:00 a.m. today, August 10th, 2015.

Now that we have a prospectus and financials in hand, we can conduct a quick but informed valuation of Trinidad and Tobago NGL Ltd (“TTNGL”), the vehicle which is being listed on the TTSE.

The phrase “What a difference a year makes” has never been more appropriate. In the interceding period, West Texas Intermediate crude oil prices have collapsed from over USD 100 per barrel, to USD 43.75 per barrel (as of August 7th, 2015). The same has largely held true for propane, butane and natural gasoline, which are the three commodities that PPGPL produces using natural gas as its feedstock. But what impact has it had on PPGPL? How much does it actually decrease the attractiveness or increase the risk of the investment in TTNGL? In short, what difference does a year make?

Read more…

Baha Mar, a crusade and a dream, or just another nightmare in paradise?

3 August 2015

Baha Mar Logo

What is Baha Mar?

Baha Mar is a resort currently under construction on the island of New Providence in the Bahamas. Planned amenities at the resort include four hotels; the Baha Mar Casino and Hotel, the Grand Hyatt at Baha Mar, the SLS Lux, and the Rosewood at Baha Mar.

Overall the resort when completed will contain 2,200 rooms, 284 private residences, a 100,000 square-foot casino, a 30,000 square-foot spa, over 30 food and beverage options, luxury shopping, art galleries, and studios, a waterpark, and the TPC at Baha Mar golf course designed by golfing legend Jack Nicklaus.

The resort is owned by Baha Mar Resorts Limited and is managed by Chairman and Chief Executive Officer (CEO) Sarkis Izmirlian. The Izmirlian family as discussed below are significant investors in the project.

Read more…

How the 2015 T&T General Election May Impact Your Investment

27 July 2015

T&T General Election 2015









It’s that time again. The general election has been set for 7 September, 2015 and political advertisements are slowly creeping their way into our newspapers, televisions, and favourite websites. It’s no secret that politics directly affects the economy. For example, it affects the labour market (by creating jobs, increasing wages and productivity etc), the housing market and consumer spending, just to name a few.

But what does this mean for local investors?

Since the two major political parties hold similar social democratic ideologies, the election result should not drastically affect the financial markets in the short term. Read more…

The Greek problem in a nutshell – time to break out the Ouzo?

10 July 2015

Greek Economy






The Greek economy – no more moussaka?

There is no easy way to say it and no way to sugar-coat it either: the Greek economy is in a mess!

Greece’s debt mountain stands at 320 billion euros of which 240 billion euros is represented by European bailout funds. The country’s debt to GDP ratio stands at a staggering 177% and there has been a 25% fall in GDP since 2010. The unemployment rate is currently at 25% and among those younger than 25, the rate is above 50%. Read more…

A Quick Look at Guardian Media Limited

22 June 2015

150622 GML Logo




Who are Guardian Media Limited?

Guardian Media Limited (GML) is a limited liability company formed in 1917 as the Trinidad Publishing Company. In 2010 the company changed its name to Guardian Media Limited.

GML is a public company operating in Trinidad and Tobago, and is a 51% subsidiary of the ANSA McAL Group. The primary activities of GML are the publication of the Guardian and Sunday Guardian Newspapers, the operation of six radio broadcasting stations, and one television station. Read more…

A quick look at the One Caribbean Media Company

5 June 2015

Who are One Caribbean Media Company?

One Caribbean Media (OCM) is a group of companies engaged primarily in the field of media services, wholesale distribution, and the sale of other goods throughout the Caribbean region. The group operates out of locations in Trinidad and Tobago, Barbados and other territories in the Eastern Caribbean. Read more…

5 June 2015

fgh price 2

Massy Group & ANSA McAl: A Conglomerate Comparison

27 May 2015

Who are Massy Holdings Limited and the ANSA McAL Group?

Both Massy Holdings and the ANSA McAL Group are Trinidadian conglomerates with extensive experience and interests in a wide and diverse array of local and regional businesses.
Read more…

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