St. Kitts and Nevis' Prime Minister and Minister of Finance, Hon. Dr. Denzil L. Douglas (r) and Chairman of the TDC Group of Companies, Mr. Michael Morton.

The local company in its annual report for the period 1st February 2005 to January 31st 2006 said it realised a pretax profit of EC$11,494,681 compared to EC$11,213,516 in the previous year.

TDC said that after paying corporation tax of EC$3,302,195, it realised a net income of EC$8,121,923 compared to EC$7,842,269 for the previous year.

Board Chairman, Mr. Michael Morton in his report to shareholders said as was the case the previous year, the St. Kitts and Nevis economy "remained buoyant largely due to the vibrancy of the tourism and construction sectors."

The 2006 Report, released at the Annual General Meeting (AGM) at the Ocean Terrace Inn (OTI) last Thursday documented improved performance in several areas including the Automotive Divisions, the Home and Building Depots, the Business Equipment and Stationery Department on St. Kitts and on Nevis, the Shipping Agencies, TDC Rentals in St. Kitts, the St. Kitts Bottling Company, St. Kitts Masonry Products Limited and MAICO, its associated insurance company in Anguilla.

According to the report, TDC's Automotive Divisions benefited immensely from the popularity of the new Toyota and Suzuki models. Both divisions achieved impressive gains in profitability, unit sales and market share.

TDC said its Home and Building Depots produced improved results. "The construction industry remained buoyant fueled by activities related to the construction of facilities for the Cricket World Cup, several tourism related real estate developments and the general expansion and improvements of the housing stock," said the Report.

TDC's Business Equipment and Stationery business in St. Kitts produced slightly reduced profits, while the Nevis operations recovered from the loss making position of the last two years and earned a small profit.

TDC, which took over the City Drug Store last year, reported that the results for the nine-month period "were very satisfactory and the initial prospects for the business appear positive."

"The Shipping Agencies produced good overall results in a business segment that is very competitive and price sensitive.  Total tonnage handled on the St. Kitts market continues to grow. However, the absence of a reliable principal serving Nevis has resulted in the contraction of our business on that island," said the report.

It added that TDC Rentals Ltd performed creditably, albeit below last year's results and management expectations. The company experienced growth in its vehicle rental business but hire purchase sales were reduced.

The results of TDC Rentals (Nevis) Ltd were disappointing as that company generated a net operating loss for the year.

TDC said its hire purchase business was rather depressed and the vehicle rentals showed little growth.

"Liquidity in the local banking sector and the growing tendency of local consumers to take organised shopping trips to neighboring islands continue to have a very negative effect on hire purchase sales," said the report.

The St. Kitts and Nevis Finance Company Ltd (FINCO) had a mixed year characterised by reduced returns on its investments and loans, the shortage of funds for long term mortgage lending and some growth in its vehicle and consumer financing business.

The company was successful in recovering income from several delinquent accounts for which loan loss provisions had previously been made and initiatives to increase the company's capacity to provide more long term lending have started and will intensify this year.

TDC said its St. Kitts-Nevis Insurance Company Ltd (SNIC) experienced no catastrophic events during the year, which had one of the most active hurricane seasons on record.

"However, the performance of the motor portfolio was less than satisfactory as claims climbed steeply.  A new entrant into the local market pursued a policy of aggressively cutting rates to generate business.  On some occasions, SNIC had to follow suit to compete and prevent loss in market share.  All these factors contributed to reduced profits for the year under review, the report said.

A TDC subsidiary, Ocean Terrace Inn, reported low occupancy, depressed average room rates and increased operating expenses combined to return the hotel to a loss making position, after generating a small profit last year.

The Airline Services companies in both St. Kitts and Nevis experienced another very challenging year because of the reduced volume of aircrafts handled, increased employment cost and provisions for bad debts.  TDC Tours produced positive results as its cruise and hotel business expanded.

According to the annual report, the St. Kitts Bottling Company Ltd produced record profits as the company benefited from the completion of its first full year as distributor of mobile phone cards for a local provider as well as increased sales of soft drinks.

A new state of the art PET plant has been ordered and is due to be installed and commissioned within the next six months.  Initially, the current plant will operate alongside the new one until it is phased out over time.

St. Kitts Masonry Products Ltd made a small profit for the year under review.  However, its operations continue to be hampered by the unavailability of reliable and cost effective source of raw materials.

Discussions with the government to make available, lands suitable for mining, are ongoing and there are signs that some progress is being made.

MAICO, the associated insurance company in Anguilla, continued to generate significant profits and again paid satisfactory dividends.

TDC has been profitable over the years reporting pre-tax profits of EC$3 million in 1992; EC$4.3 million in 1993; EC$4.7 million in 1994; EC$5.4 million in 1995; EC$6.5 million in 1996; EC$7.1 million in 1997; EC$8.1 million in 1998; EC$7.4 million in 1999; EC$6.5 million in 2000, EC$5.6 million in 2001, EC$7.9 million in 2002, EC$8.6 million in 2003 and EC$11.4 million in 2004.