• FESCO’s earnings jumped 176.4% during the quarter ending December 2025 to $242.70Mn, fueled by strong revenue growth and lower finance costs.
• Quarterly revenues revved up 20.1% to $8.80Bn, buoyed by a 21.7% jump in total litres pumped across all products, including LPG. While pump prices for gasoline (E10 87 and E10 90) and diesel (ADO and ULSD) are set by the market and largely outside the company’s control, management keeps its foot on the gas when it comes to driving higher volumes.
• In line with higher volumes and higher fuel prices, the cost of sales rose 18.8% to $8.20Bn. However, this was outpaced by revenue growth, which allowed gross profit margin to rise by 102bps to 6.8%
• Operating expenses totaled $315.63Mn for the quarter, representing a 17.1% year-over-year increase compared to the same period last year. Higher staff costs, security expenses, motor vehicle expenses, and depreciation primarily drove the increase. Staff costs amounted to J$126.90Mn, up J$19.90Mn or 18.6% year-over-year, reflecting the expansion of the company’s workforce. This increase also incorporates adjustments to wage rates and salaries, Christmas bonuses, and costs associated with expanded operations, including additional company-operated locations and an expanded range of activities.
• Security expenses totaled J$22.40Mn for the quarter, an increase of J$9.2Mn or 69.5% year-over-year, reflecting additional operating locations and higher security rates. Motor vehicle expenses amounted to J$12.90Mn, a decrease of J$2.30Mn or 14.9% year-over-year. These costs, which include toll charges, reflect growth in the fleet to primarily support the haulage and distribution of LPG.
• Depreciation expense for the quarter was J$61.0Mn, reflecting the expansion of Plant, Property and Equipment (PPE), including investments in LPG infrastructure and service station assets.
• With strong performances in both the 2^nd and 3^rd quarters, Fesco has reported its best nine-month performance, with net profit of J$587.89Mn up 44.63%, exceeding its best full-year net profit. Topline expansion (5.97%) and lower finance cost (-13.30%) were the primary drivers of the nine-month performance.
• Its operations suffered minimal damage following Hurricane Melissa, even so the company-owned service stations and filling plants are fully covered by insurance. Looking ahead, FESCO plans to open four to five new dealer-operated service stations during the 2026 calendar year. This aligns with the company’s strategy of expanding its network, which now exceeds 20 stations islandwide, while delivering earnings growth at a compound annual growth rate (CAGR) of 47.3% over the past four years. This strategy has proven effective, and we believe further expansion will continue to create value for shareholders.
• FESCO’s stock has declined 9.1% year-to-date, closing at J$2.81 on Thursday. At its current price, FESCO trades at a price-to-earnings (P/E) ratio of 10.9x, which is below the Junior Market Distribution sector average of 14.1x. Despite stronger year-to-date performance, the stock price has remained largely unresponsive, suggesting that persistent negative market sentiment continues to overshadow solid underlying fundamentals.

(Sources: JSE & NCBCM Research)

• Following the catastrophic impact of Hurricane Melissa, which caused over US$8.8Bn in damages, the Government of Jamaica has proposed several tax adjustments to fund reconstruction and bridge the fiscal gap.
• To bolster the national budget and address public health, the Government will introduce a Special Consumption Tax (SCT) of $0.02 per ml on sweetened beverages, projected to generate $10.1Bn. Simultaneously, the tax net is being modernised to include international digital services and intangibles, such as streaming platforms and online software, bringing these globally consumed services under the local GCT framework.
• To preserve tax value and curb harmful consumption, the SCT on Alcohol will increase from $1,230 to $1,400 per Litre of Pure Alcohol (LPA), and the tax on Cigarettes will rise by $3.00 per stick (moving to $20.00 total).
• The Environmental Protection Levy (EPL) will increase from 0.5% to 0.8%, and the domestic tax base will be expanded to cover 100% of local sales to bolster climate resilience. It was first imposed on all goods imported, but later extended to the domestic market.
• The GCT rate for Tourism will be hiked from 10% to the standard 15% (effective April 2027). Furthermore, the 20% duty concession for public officials will be modified, requiring them to pay GCT on imported motor vehicles.
• To safeguard fiscal stability during the ongoing economic recovery, the Government has committed to extending the $11.4Bn annual transfer from the National Housing Trust (NHT). This budgetary support will now continue for an additional five-year term, securing essential revenue through 2031.
• The implementation of these new revenue measures is projected to generate $29.44Bn in revenues for the FY 2026/2027 fiscal year. As these measures normalise within the economy, the government anticipates a sustained revenue contribution of $15.60Bn for the 2027/2028 cycle. This two-year revenue stream is a critical part of the government's strategy to maintain fiscal discipline while funding essential infrastructure projects.

(Source: Ministry of Finance)

• According to the International Monetary Fund (IMF), Suriname is at a historic crossroads. In its latest Article IV report, the IMF welcomed the progress achieved under its program, concluded in March 2025, while noting that recent fiscal and monetary slippages have eroded earlier stabilisation gains at a time when Suriname approaches a pivotal transition to large‑scale oil production. The development of this new resource has the potential to generate significant improvements in living standards, but to do so, action is needed to build the institutions to manage these wealth gains; improve health, education and social outcomes; invest in infrastructure; and preserve macroeconomic stability.
• According to the IMF, GDP growth is slowing in Suriname, driven by a decline in gold production, and inflation has reversed its downward path. Gold production declined by 8% in 2024 and continued to disappoint in the first half of 2025. On the other hand, the growth of the non-natural resource economy was estimated at above 4% in 2024 and is expected to maintain a robust expansion. Inflation rose to 10.9% in October, largely due to sizable depreciation triggered by fiscal and monetary slippages.
• Nevertheless, economic activity is expected to remain solid. Non-natural resource growth is estimated to reach 4.7%in 2026, supported by positive oil-related sentiment. Activity related to the development of new offshore oil fields and relatively stable gold production is expected to keep GDP growth around 4% in 2026-27, according to the IMF. Furthermore, in 2028, offshore hydrocarbon production is expected to come online, pushing growth to around 30%.
• That said, progress on fiscal consolidation has reversed. The primary balance amounted to -1.1% of GDP in August, and supplier arrears grew by 1.75%. Expenditure rose significantly before the May election, unwinding a significant portion of the fiscal adjustment that was undertaken as part of Suriname’s IMF-supported program. There has also been insufficient effort by the new government to change course.
• Under its current policy, the IMF projects a primary balance of around 0% of GDP in 2026-27 as one-off expenditures from 2025 are not expected to be repeated, though lower than the targeted primary surplus of 2.7%. Consequently, additional measures to achieve fiscal consolidation are urgently needed. Faster consolidation would help restore cash buffers, improve confidence, and help retain regular market access. Limiting spending would also help contain the ongoing injection of local currency liquidity, bring inflation down to around 5%, and help anchor expectations. Fiscal prudence would also help build buffers against downside risks.
• Suriname’s socio-economic and political landscape may also constrain reforms. Of note, social vulnerabilities persist due to significant leakages in benefit programs and difficulties in reaching rural and interior populations. The new government, which took office in July 2025. intends to build on reform progress but is facing political and social pressure to relax fiscal policy and increase spending to address social and developmental needs.
• Overall, there remain important near-term downside risks to the outlook. Policy slippages in the coming two years have the potential to adversely affect macroeconomic stability. A renewed drought would again increase the cost of electricity generation, adding to the fiscal deficit and inflation. Finally, higher global food prices could also increase import inflation, while a decline in gold prices (or further declines in gold production) would undermine exports. These would result in lower fiscal revenues and constrain overall growth.

(Source: IMF)

• BP p.l.c (BP)^[1] is seeking a license from the U.S. government to develop its Manakin-Cocuina gas field that crosses the border between Trinidad and Tobago and Venezuela, its interim CEO Carol Howle told Reuters. Since the capture by the U.S. of Venezuela's former President Nicolas Maduro, several energy companies have been seeking to move forward with their projects in the South American country, including Shell with its Dragon and Manatee projects and BP with Manakin.
• BP intends to develop the field to bring more than 1 trillion cubic feet of gas to Trinidad to convert into liquefied natural gas for export. The company owns 45% of Trinidad's flagship Atlantic Liquefied Natural Gas (LNG) plants, which was 15% of BP's total LNG production in 2025, data from financial firm LSEG show.
• BP requires a license from the U.S. government to produce the Field, given continued U.S. sanctions against Venezuela's state-owned company, Petróleos de Venezuela (PDVSA), which operates on the Venezuela side of the border. The company originally had an Office of Foreign Assets Control (OFAC) license from the U.S. and a license from Venezuela to develop the Field, but it was cancelled by the Trump administration in 2025.
• Although the developments on the ground in Venezuela remain fluid, neighbouring Trinidad and Tobago stands to benefit from Nicolás Maduro’s US-orchestrated ouster. With Prime Minister Kamla Persad-Bissessar offering her support for the U.S. military’s Caribbean deployment previously, relations with Washington have strengthened, and the U.S. has pledged bilateral security and energy partnerships. This therefore improves the prospects for energy projects, providing a tailwind for Trinidad and Tobago’s energy sector.

(Sources: Reuters & BMI, A Fitch Solutions Company)

^[1] BP p.l.c., an integrated energy company, engages in the oil and gas business worldwide. The company operates through Gas & Low Carbon Energy, Oil Production & Operations, and Customers & Products segments.

• Americans are shouldering almost all of President Donald Trump’s import tax surge, from the Federal Reserve Bank of New York said on Thursday, February 12, 2026. The bank said 90% of the tariffs imposed by the president on imported goods are borne by American consumers and companies.
• The report pushes back against the Trump administration’s argument that the levies are paid by foreigners. The report evaluated how tariffs impacted the economy last year, when the average of the taxes went from 2.6% to 13%. The average level shifted over the course of the year and was at its highest in April and May 2025, when Trump pumped up tariffs on Chinese goods to 125% before lowering them back to a still heady 113%.
• The authors based their analysis on how tariffs worked in the first Trump term. When faced with these types of taxes, “our past work found that foreign exporters did not lower their prices at all, so the full incidence of the tariffs was borne by the U.S. That is, there was 100% pass-through from tariffs into import prices.” Between January and August of last year, Americans took 94% of the hit from Trump’s tariffs. During September and October, that ebbed to 92%, settling to 86% in November.
• The New York Fed findings jibe with a report put out by the Congressional Budget Office (CBO) on Wednesday, February 11, 2026. It said “higher tariffs directly increase the cost of imported goods, raising prices for U.S. consumers and businesses.” When it comes to who will pay the tariffs, the CBO said foreign exporters will absorb 5% of the cost, and in the near term, “U.S. businesses will absorb 30% of the import price increases by reducing their profit margins; the remaining 70% will be passed through to consumers by raising prices.”
• Federal Reserve officials believe that much of the overshoot of their 2% inflation target this year is related to trade tariffs, and that has complicated their ability to cut interest rates after 75 basis points worth of easing last year, which was done in large part to support the job market. In addition, it is expected that tariff impacts will wane as the year progresses and will likely represent a one-time increase in the price level. That could open the door to more rate cuts, although it also means that the tariffs are likely to lead to an overall increase in the cost of living faced by Americans.

(Source: Reuters)

• European Union (EU) leaders agreed on Thursday, February 12, 2026, on a wide-ranging set of commitments to improve how the bloc's border-free internal market works so Europe's businesses can be competitive and survive aggressive economic rivalry from the U.S. and China.
• Meeting at a Belgian castle, the leaders stressed how urgent it was to act and agreed to speed up the completion of a savings and investment union, review merger rules to help create European champions, make it easier for companies to get started and scale up and cut red tape throughout, top EU officials said.
• The European Commission will present in March 2026 a plan on how to proceed with this deepening of the European Union's single market of 450 million consumers, with the aim for leaders to agree on a concrete timetable. That will include allowing a preference for European goods in public purchases in strategic sectors, von der Leyen told a press conference at the end of the meeting.
• EU growth has persistently lagged that of the United States and China and EU productivity and innovation in fields such as AI has fallen short, with the bloc also squeezed by tariffs and export curbs by its global rivals. To speed things up, von der Leyen said the EU executive arm would push on with a long delayed capital markets union that would allow some 10 trillion euros ($11.86 trillion) of savings now languishing in bank accounts to be invested in the EU economy.
• While all EU countries want a more competitive bloc, they disagree on how to get there, and have done so for years, on key issues such as whether to issue joint euro bonds, or on how to cut electricity prices. Many leaders also stressed it was vital the EU acts on high energy prices, with Europe's industry facing power prices that are more than double those in the U.S. and China.
• While no decisions on this were made, the Commission will put forward options on how to proceed at the next EU summit in March 2026, such as whether to continue a system whereby the most expensive energy source, typically gas, sets a common power price, including for cheaper renewables and nuclear.

(Source: Reuters)

• Aided by robust topline growth and lower finance cost, OMNI Industries Limited (OMNI) posted a 214.1% turnaround in net earnings to $28.19Mn for the quarter ended December 2025.
• Quarterly revenues climbed 49.9% year-over-year to J$615.54Mn, underpinned by the construction segment, which contributed 57% of total revenue amid a period of robust local infrastructure development. In addition to steady underlying demand, its performance was further bolstered by a tactical surge in domestic orders following Hurricane Melissa, as clients moved quickly to secure critical construction and storage assets.
• Cost of sales rose 45.9% to $373.67Mn as OMNI temporarily sourced certain raw materials from non-traditional suppliers to maintain production schedules and ensure product availability. Management noted that while this strategy resulted in higher input costs and higher direct costs, it effectively preserved operational continuity and enabled the company to meet customer commitments during a period of heightened logistical volatility. Importantly, revenue growth outpaced the rise in direct costs, resulting in a 167-basis-point expansion in gross margin to 39.3%.
• Operating expenses rose 21.7% year-over-year (up J$38Mn), largely driven by higher haulage costs and increased depreciation following the commissioning of new machinery. Despite the rise in spending, these expenses were necessary to support the company’s expanded operational capacity.
• In contrast, finance costs trended downward, falling 10% to J$11Mn in the corresponding quarter of the prior year, reflecting improved debt management and tighter control over financing costs.
• Looking ahead, the company is set to benefit from Jamaica's multi-year national reconstruction phase following Hurricane Melissa. OMNI is leveraging its newly upgraded injection-moulding capacity to meet the massive surge in demand for PVC pipes, Alu-zinc roofing, and electrical conduit items critical to the restoration of water and power by agencies like the NWC and JPS.
• Nevertheless, some headwinds remain, particularly in the form of global logistics disruptions and high input costs that could continue to squeeze operating margins. Even so, OMNI's strategic expansion into regional markets like Guyana and Barbados, combined with its role as a first responder in the local hardware supply chain, positions it for sustained volume growth.
• Omni’s stock has declined 0.3% year-to-date, closing at J$0.96 on Wednesday. At its current price, OMNI trades at a price-to-earnings (P/E) ratio of 14.1x, which is slightly below the Junior Market Distribution sector average of 14.5x.

(Sources: JSE & NCBCM Research)

• The Senate has approved amendments to the Financial Administration and Audit Act 2026, which will remove the cap on the maximum amount that may be held in the National Natural Disaster Reserve Fund (NNDRF).
• The legislative measure seeks to cease mandatory annual transfers from the Consolidated Fund to the NNDRF once the balance is at or above $10Bn, and to remove Section 13A (1), which makes provision for the transfer of $200Mn from the Consolidated Fund to the NNDRF during the financial year 2023/2024.
• Previously, the fund couldn't hold more than $10Bn. Because the payouts from insurance and catastrophe bonds for Hurricane Melissa exceeded $115Bn, the law had to be changed so the government could actually keep and use all that money. It allows the government to stop mandatory transfers from the general budget into the disaster fund once it’s "full enough," giving them more cash to spend on immediate needs like road repairs
• “Using the example of Melissa, it’s clear that to accommodate funds triggered by disasters of similar scale or even less, the steps to be taken under this bill are logical. We must be agile and responsive to the realities that confront us, and the amendments proposed today provide an appropriate level of flexibility,” Senate, Minister of Foreign Affairs and Foreign Trade, Senator the Hon. Kamina Johnson Smith said.
• The NNDRF was established pursuant to the Financial Administration and Audit Act 2024. The legislation establishing the Fund was designed to provide a disaster risk management facility capable of enabling an immediate financial response to any disaster affecting Jamaica that results in a fiscal impact equivalent to or greater than 1.5 per cent of gross domestic product (GDP). This would trigger a disbursement under a natural disaster instrument held by or on behalf of the Government.
• The passage of Hurricane Melissa on October 28, 2025, triggered several natural-disaster instruments, resulting in a flow of resources in excess of $10Bn.

(Source: JIS News)

• The International Monetary Fund (IMF) has completed its latest consultations with the Eastern Caribbean Central Bank (ECCB) on the performance of the Eastern Caribbean Currency Union (ECCU)^[1], highlighting both strengths and ongoing vulnerabilities across the subregion’s economy.
• According to the IMF, the region has sustained robust post-pandemic expansion. Strong tourism arrivals and ongoing infrastructure investment supported regional growth at an estimated 3.0% in 2025. However, regional growth potential has declined over recent decades, reflecting diminishing contributions from productivity as well as human and physical capital. This stems from structural impediments to efficiency, including barriers to credit and productive investment, burdensome administrative processes and labour skills gaps and mismatches. As such, the IMF noted that a coordinated regional strategy to ease constraints across these dimensions is essential to raise resilient growth prospects.
• Looking ahead, economic momentum is expected to moderate, with risks tilted to the downside. With tourism operating near full capacity, average regional growth is expected to slow to around 2.5% over the medium term amid persistent productivity constraints, adverse demographic trends, and limited fiscal space for public investment. The outlook is also subject to sizeable downside risks as evolving trade and travel barriers, and ongoing geopolitical tensions amplify the region’s long-standing vulnerabilities. This includes its heavy dependence on tourism and imports, exposure to natural disasters, persistently high public debt, and reliance on uncertain Citizenship-by-Investment (CBI) inflows.
• Deeper trade integration was identified as a key opportunity for growth and diversification. At present, connectivity challenges limit expansion into new markets. The ECCU remains heavily reliant on the United States and trades less than expected with partners outside the Caribbean, largely due to shipping and airlift limitations. The Fund recommended stronger regional policy coordination to address these barriers, including harmonised customs procedures, a unified single window trade platform, and mutual recognition agreements to improve institutional efficiency and reduce costs.
• On the fiscal front, fiscal outcomes have lagged economic performance. With union-wide public debt reduction stalling, partially reflecting the impact of recurring external shocks, several members are increasingly at risk of not meeting the 60% of GDP regional public debt target by 2035. Uneven progress in debt reduction, therefore, underscores the need to strengthen union-wide institutional mechanisms to reinforce fiscal sustainability and resilience.
• According to the IMF, a union-wide, time-bound commitment to implementing national fiscal frameworks that effectively align ECCU members' annual budgets with the regional debt target, grounded in harmonised design principles, would strengthen fiscal discipline, support sustained debt reduction, and better equip the union to navigate future shocks. Deeper policy coordination would also help preserve space for priority investment amid ongoing debt reduction and recurrent shock-related spending pressures. Priorities should include scaling back costly tax exemptions, especially in tourism, and strengthening social safety nets to reduce reliance on distortionary, untargeted fiscal responses to shocks.

_________________________

¹The ECCU comprises the nations of Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines and the British territories of Anguilla and Montserrat.

(Source: IMF)

• The Dominican Republic’s cement sector ended 2025 with 2.3% growth in sales volume, driven largely by strong export performance, despite a slowdown in domestic construction activity. Sales to the local market increased by 0.9%, reflecting stability in domestic demand but remaining well below the growth levels seen in previous years, when construction activity was more dynamic. In contrast, cement exports rose by 9.2%, supported by investments to expand installed capacity, improve operational efficiency, and meet international quality standards.
• According to Jorge David Pérez, president of the Dominican Association of Cement Producers (ADOCEM), the investments have enabled companies to supply both local and international markets, position Dominican cement in strategic regional destinations, generate foreign exchange, reduce the trade deficit, and strengthen employment and industrial activity. He noted that the sector’s performance mirrors the challenges faced by construction in 2025, which closed the year with 1.8% negative growth, according to Central Bank data.
• Of note, a strictly enforced, hawkish immigration policy meaningfully depressed the construction labour force, with the industry shedding nearly 25,000 jobs in the first half of 2025 alone, a fall of 5.4%. Public comments by industry leaders, citing a lack of construction workers, and the uptick in deportations of Haitian migrants (who make up the majority of the construction sector labour force in the Dominican Republic), led to projects being increasingly delayed by the lack of workers or rising labour costs.
• That said, Pérez highlighted the resilience of the cement industry in a more demanding economic environment, while stressing the need to promote public policies that stimulate construction, infrastructure, and housing investment, given the sector’s key role in economic growth, competitiveness and job creation.

(Sources: Dominican Today & BMI, A Fitch Solutions Company)