Global technology giants like Facebook that operate online in TT without paying taxes undermine local media houses that make investments and create jobs, Ansa McAl chairman, Norman Sabga said yesterday.
He shared his views as he replied to Newsdayâs query about a recent $11 million loss by Guardian Media Ltd (GML), after he presented the conglomerateâs latest half year report at the Tatil Building, Port of Spain.
“I have a problem with Facebook, Twitter and the other international companies being able to sell media in TT without paying a significant penalty,” he said, likening it to tax-free online shopping. “I donât think these (foreign) organisations have any employees on the ground, I donât think they pay tax, and they take foreign exchange because payments go to them in foreign exchange. They have a huge advantage in the market-place but they have nothing on the ground.” They do not invest in TT, he added.
Sabga did not object to locals using those platforms, but said local media must be able to enjoy a level playing field with them.
“That does not exist, because we have property, we pay taxes and business levies and every other cost associated with the market and we employ 600 (workers).”
Otherwise, Sabga said Ansa McAl had invested very heavily in automation for GML and expects to see a return on it. He expressed commitment to GML.
“We think weâll reverse the trend and improve on the returns. We are in a transitional period.”
The regionâs biggest conglomerate made a $303 million profit after tax for the first six months of 2019, down six per cent from the same period last year ($323 million), while revenues were up one per cent ($3.1 billion) verus $3.06 billion last year.
Asked whether a lull in the local economy was a cause for the two per cent drop in profits (despite the one per cent rise in revenues), Sabga said the reason for the dip was certain one-off costs plus a rise in some costs, such as $25 million for restructuring.
“Our volumes are on par and gross profits are on par, so it is not a result of the economy.”
Sabga also referred to a new $150 million furnace at Carib Glassworks to produce cheaper, lighter and stronger beer bottles; a newly acquired wind-farm in Costa Rica and an ongoing $300 million investment in a clay-block factory. Newsday asked how the conglomerate was coping with foreign exchange shortages in TT, group finance director Aneal Maharaj said the company was now doing business in euros (plus US dollars) but said a six per cent currency conversion fee for euros was an “astronomical” charge to the low-margin distribution business. The fee amounted to $10 million, even as he said obtaining foreign exchange remains a challenge. He said the group is trying to increase its efficiency.
“The cost of doing business is increasing,” said Maharaj, saying TT is disadvantaged relative to other Caribbean nations.
Andrew Sabga, Ansaâs CEO, said the Carib Glassworks upgrade now opens up new export markets for the conglomerate to earn more foreign exchange.
Earlier Norman Sabga confirmed the conglomerate had lost the local dealership for BMW but said, in terms of their overall operations, that was financially negligible, as its contribution to pre-tax profit was less than 2.3 per cent.
“BMW established a master dealer and he decided he wanted the brand, because of the good work we had done to build the brand. So he is taking it over. Heâs excited. He wants a good thing.”
LINK ORIGINAL: News day