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MEEG’s Q1 Earnings Adversely Affected By Omicron Variant Published: 22 March 2022

  • Main Events Entertainment Group reported a net loss of $40.64Mn for its first three months ending January 31, 2022, as higher costs outpaced revenue growth. The emergence of the Omicron variant, which resulted in the re-imposition of restrictive measures brought an immediate and sharp decline in demand for its services and this curtailed topline growth. 
  • The company realised a 14.7% year over year increase in revenues during the quarter. However, stronger growth was expected before the emergence of the Omicron variant. Management highlighted that it began the year with strong client interest for its core services. However, with the emergence of the Omicron variant by mid-December, it faced multiple requests to scale back or defer holiday season projects. 
  • In some instances, planning and preparatory work had already begun, and certain costs had already been incurred. As such, these costs turned into sunk costs, which contributed to elevated direct and indirect costs of $57.61Mn (88.5%) and $20.63Mn (32.0%), respectively.
  • The company's prospects for the remainder of its financial year have improved significantly primarily due to the full withdrawal of the COVID-19 restrictions on the entertainment industry. MEEG is expected to see increased demand for its services supported by pent-up demand from the general public for entertainment services, which should positively impact its financial performance. 
  • MEEG’s stock price has increased by 107.7% since the start of the calendar year and closed Monday’s trading session at $9.35.

(Source: Company Financials)

Eccles To Be Transformed With US$25M Wharf–Project Creates Opportunity For Over 50 Direct Jobs Published: 22 March 2022

  • The physical landscape of Eccles, East Bank Demerara, is set to be transformed with the construction of a US$25 million wharf facility to service Guyana’s fast-growing oil-and-gas sector. 
  • Once completed, the wharf is expected to accommodate a total of three vessels measuring 75 meters. The project will create direct jobs for over 50 persons during and after the construction phase. 
  • The timely development of such projects and simultaneous exploration success offshore will enable the steady advancement of human resource capabilities and enhanced economic growth. Additionally, outside of investments within the oil-and-gas sector, there have also been immense direct benefits as a result of the country’s oil resources. 
  • The current oil boom is expected to catapult Guyana to the ranks of the wealthiest countries in the Western Hemisphere over the next two decades, which will increase the government’s fiscal space to invest in initiatives to expand the economy and improve the overall welfare of citizens.

 (Source: Guyana Chronicle)

Let's Wait and See Impact on Government Revenue Published: 22 March 2022

  • Trinidad & Tobago Energy Minister Stuart Young has indicated that higher global ammonia prices, owing to supply issues created by the Russia-Ukraine conflict, should result in more revenue for the Government in the current fiscal year. 
  • The global market for fertilisers has been in turmoil recently as a result of higher global prices for natural gas, which is used to make ammonia. The war in Eastern Europe has pushed fertiliser prices even higher as Russia is a major exporter of potash, phosphate, and nitrogen-based fertilisers. 
  • According to the International Food Policy Research Institute, Russia accounts for 15% of global trade in nitrogenous fertilisers, 17% of global potash fertiliser exports, and 20% of the global natural gas trade, a key component in manufacturing fertilisers. Notably, earlier this month, the country announced that it would temporarily halt exports of fertilisers. 
  • T&T has ten operational ammonia plants, including two ammonia complexes on the Point Lisas Industrial Estate, with a total annual nominal capacity of about five million metric tonnes. Most of the ammonia produced at the Point Lisas Industrial Estate is exported, therefore the country should see an increase in revenue from petrochemicals. However, given the dynamics playing out in global markets, the ministry will have to employ a wait-and-see approach for revenue collection in 2022.

 (Source: Trinidad Express Newspapers)

Crude Settles Up More Than 7% As EU Mulls Russian Oil Ban Published: 22 March 2022

  • Oil prices settled up more than 7% on Monday, with global benchmark Brent climbing above $115 a barrel, as European Union nations disagreed on whether to join the United States in a Russian oil embargo after an attack on Saudi oil facilities. 
  • Brent futures settled at $115.62 per barrel, up $7.69 or 7.12%, while U.S. West Texas Intermediate (WTI) crude futures settled at $112.12 per barrel, up $7.42 or 7.09%. 
  • John Kilduff, a partner at Again Capital LLC, has said that such an embargo could be the precipice for global trouble supply-wise. Given the uncertainty about the EU's potential ban of Russian petroleum imports, U.S. gasoline futures jumped 5%. 
  • European Union governments will consider whether to impose an oil embargo on Russia over its invasion of Ukraine as they gather this week with U.S. President Joe Biden for a series of summits designed to harden the West's response to Moscow.

(Source: Reuters)

U.S., British Officials Kick Off Talks to Strengthen Trade Ties Published: 22 March 2022

  • U.S. and British officials kicked off two days of meetings on Monday to strengthen trade ties, underscoring the importance of transatlantic cooperation at a time when Western allies are ratcheting up pressure on Russia over its war in Ukraine and China for failing to condemn it. 
  • The talks in Baltimore mark a broad effort to take stock of the $260.0Bn bilateral trade relationship, while specific irritants will be set aside and dealt with separately. 
  • U.S. Trade Representative Katherine Tai said the two allies had resolved disputes over aircraft subsidies and digital services tax and were now working together closely to punish Russian President Vladimir Putin for his invasion of Ukraine. 
  • Tai told a plenary attended by dozens of U.S. and British executives and trade officials that in the battle between democracy and autocracy, democracies are rising to the moment and the world is clearly choosing the side of peace and security, so it's never been more important for them to work to strengthen their economic ties with their closest allies, like the United Kingdom. 
  • Tai said U.S. and British officials would work to identify mutual trade priorities and chart a path to promote innovation and inclusive economic growth for citizens on both sides of the Atlantic.

(Source: Reuters)

Higher Costs & Lower Finance Income Dampen LAB’s Q1 Performance Published: 18 March 2022

  • The LAB reported a net profit of $66.22Mn for its first quarter ending January 31, 2022, which represents a 1.2% or $0.8Mn decrease relative to the prior period, despite it recording double-digit revenue growth of 24.5% or $87.22Mn. 
  • The revenue growth was attributable to increases in the company’s core business, media placement (up $93.20Mn or 62.2%) and advertising agency (up $3.60Mn or 6.4%). Production was down $9.60Mn or 6.4%. 
  • This led to its gross profit increasing by $27.60Mn or 24.0% year over year. However, its gross profit margin was relatively unchanged at 32.2%. 
  • In spite of the increase in revenues and gross profit, there was a drop in net profit largely owing to a rise in indirect costs and fall in finance income. Administrative, Selling and Distribution expenses increased by 41.8% or $22.23Mn due to higher staff costs, repairs and maintenance of production equipment and depreciation and amortization costs. Further, the company experienced a reduction in its finance income of $6.10Mn and reported a loss of $1.30Mn from its subsidiary, Scope Caribbean. 
  • The company is expected to see stronger demand for its digital advertising services as the economy fully reopens, which should support growth in its profitability, if complemented with effective cost containment measures. 
  • LAB’s stock price has decreased by 12.2% since the start of the calendar year. The stock closed Thursday’s trading session at $3.37 and currently trades at a P/E of 21.1x which is below the Junior Market Others average of 22.3x.

(Source: Company Financials)

Wheat Cost On the International Market Can Impact Local Wheat Products Published: 18 March 2022

  • Permanent Secretary in the Ministry of Finance, Mike Sylvester, warns that the citizens of Grenada should be mindful of the impact the ongoing war in Ukraine can have on their livelihood and living conditions as the prices of basic food items have risen sharply in recent days. 
  • The country has seen where the price of a bushel of wheat has increased from US$800 to US$1,200 in March. Like fuel, Sylvester said these prices will reach the island, as they are price takers, and have no influence on how these prices are determined. 
  • While the country’s wheat is imported from the US market, due to the shortage created by the Russia-Ukraine war, some of the distributors and suppliers are tapping into the South American market. 
  • Notably, while price increases for commodities began following the global lockdown during the early days of COVID-19 due to a major shortage of supplies on the market, this current crisis will only worsen the current economic conditions and further impede growth in Grenada if the conflict is prolonged.

(Source: NOW Grenada)

Value-Added Products to Fuel Guyanese Drive Into Hemp Industry Published: 18 March 2022

  • Guyana is eyeing the development of a viable hemp industry through the efficient utilisation of the value-added aspects of the plant. 
  • President Irfaan Ali revealed that his government would be moving in this direction as processing and value-added facilities would generate employment and a high-value return. 
  • Consequently, the President intends to meet marijuana farmers on the possibility of them capitalising on the hemp industry and legally earning money. He believes the hemp industry will be a net gain for the county and can also help in at-risk communities. 
  • Moreover, the Global Industrial Hemp Markets Report 2021-2028, published by GlobeNewswire last November, states that the global industrial hemp market size is expected to reach US$12.01Bn by 2028 and to expand at a compound annual growth rate of 16.2% from 2021 to 2028.

(Source: Our Today)

U.S. Economy Flexes Muscle with Jobless Benefit Rolls At A 52-Year Low Published: 18 March 2022

  • The number of Americans filing new claims for unemployment benefits fell last week as demand for labour remained strong, positioning the economy for another month of solid job gains. Unemployment benefit rolls were the smallest in 52 years in early March, the Labour Department's weekly jobless claims report on Thursday also showed. 
  • Signs of the economy's underlying strength against the backdrop of rising inflation and geopolitical tensions were also evident in other reports showing an acceleration in manufacturing production last month and a sharp rebound in homebuilding. 
  • The three-week-old Russia-Ukraine war poses a risk to the U.S. labour market through disruptions of supply chains and record-high gasoline prices. However, with companies hungry for labour, economists are optimistic the labour market and economy will ride out the storm. 
  • Factories in the region encompassing eastern Pennsylvania, southern New Jersey and Delaware hired more workers and increased hours for employees. They, however, continued to struggle with higher input prices and delays getting materials, which kept order backlogs long.

(Source: Reuters)

Big Gap Remains in Peace Talks Between Russia And Ukraine Published: 18 March 2022

  • Ukraine and Russia are taking peace talks seriously but a very big gap remains between the two sides, Western officials said on Thursday, adding Russian President Vladimir Putin did not seem in the mood to compromise. 
  • Although both sides have pointed to limited progress in peace talks this week, Putin showed little sign of relenting during a televised speech in which he inveighed against "traitors and scum" at home who helped the West, and said the Russian people would spit them out like gnats. 
  • Both sides are taking the talks seriously but there is a very, very big gap between the positions in question, one Western official said, speaking on condition of anonymity. 
  • A Ukrainian negotiator has said that a "model" of legally binding security guarantees that would offer Ukraine protection from a group of allies in the event of a future attack is "on the negotiating table" at talks between Kyiv and Moscow.

(Source: Reuters)