TIDMCBA
RNS Number : 3295C
Ceiba Investments Limited
22 February 2022
CEIBA INVESTMENTS LIMITED
("CEIBA" or the "Company")
(TICKER CBA, ISIN: GG00BFMDJH11)
Legal Entity Identifier: 213800XGY151JV5B1E88
TRADING UPDATE
CEIBA, the largest listed international company solely dedicated
to investing in Cuba, with interests in Cuba's commercial and
tourism real estate sectors, is pleased to provide an update on
trading, operations and investment in 2021, in particular with
respect to the operations of Inmobiliaria Monte Barreto S.A.
("Monte Barreto") and Miramar S.A. ("Miramar") and the hotel
development of TosCuba S.A.
Inmobiliaria Monte Barreto S.A. - 49% interest CEIBA Investments
Limited
Occupancy levels at the Miramar Trade Centre of Monte Barreto
have been over 95% throughout the full 2021 financial year and
demand for international-standard office accommodation in Havana
continues to exceed supply, with Monte Barreto remaining the
dominant option in this market segment.
However, as previously stated in the Company's half year
financial statements, commercial real estate activities such as the
ones carried out by Monte Barreto have been excluded from some of
Cuba's general rules relating to "liquid" payments (the ability to
transfer funds abroad on an autonomous basis, without foreign
exchange controls), and consequently the local payments of many
tenants of the joint venture are not deemed to be "liquid".
As a result, to date the joint venture continues to operate
under limited financial autonomy. It is operating under a mixed
regime having reduced liquidity requirements, in which certain
liquid resources of the joint venture are generated by the joint
venture itself from operations, and the rest are to be allocated
centrally by both the Cuban partner and the Cuban government. In
2021, Monte Barreto did not receive significant centrally allocated
liquidity rights as a result of the tenuous liquidity situation of
the country. In addition, hard currency transfers from Cuban banks
are experiencing delays.
The short term goals that the manager is presently pursuing with
Monte Barreto, its Cuban shareholder, and the relevant Cuban
authorities is to resolve the payment of dividends declared by
Monte Barreto for the period up to 30 June 2021, and to determine
in what way, and through which authorized legal exceptions, Monte
Barreto will be able to obtain full financial autonomy as from that
date going forward.
Without such goals being achieved it is likely that the discount
rates that are applied to future cash flows in order to establish
the fair value of the Miramar Trade Centre will continue to
increase. More importantly, the absence of a structure that enables
the Company to make solid projections of its cash flow and to count
on the cash dividend income generated by Monte Barreto would likely
adversely affect the ability of the Company to carry out its
present investment programs.
Miramar S.A. - 32.5% interest CEIBA Investments Limited
On 15 November 2021, Cuba re-opened its borders for
international tourism and expected to welcome a large number of
travel-hungry (and Covid-19 tired) Canadians, Europeans and
Russians. A week later the World Health Organization warned of the
new Omicron variant.
The world-wide fear of this new variant prompted a rise in new
travel restrictions that resulted in heavy cancellations from
Canada, the United Kingdom and most European countries. As a result
it would appear that Cuba's path to recovery is expected to take
longer than previously expected.
Under the negative circumstances described above, Miramar, the
Cuban joint venture company that owns four operational hotels in
Havana and Varadero, performed reasonably well during 2021 and is
expected to present a modestly positive 2021 operational year-end
result. The Meliá Habana hotel operated throughout the year as one
of Havana's principal quarantine hotels, while the Sol Palmeras
operated on a skeletal basis. The Meliá Las Americas and Meliá
Varadero hotels re-opened during November and December
respectively. The income generated by the Meliá Habana, in
combination with the positive effects of Cuba's monetary reforms,
formed the drivers behind the positive result. Under the financial
autonomy rules, Miramar generates sufficient liquidity (i.e.
international tourism income) to make all of its dividend
payments.
TosCuba S.A. - 40% interest CEIBA Investments Limited
The construction of the Meliá Trinidad Peninsula hotel has
continued to progress throughout the pandemic, albeit at a slower
pace. Major efforts were put into setting up and carrying out
tender procedures for the procurement of operating supplies &
equipment and dealing with transport and logistics. The procurement
of furniture, fittings & equipment is still pending. Soft
opening of the hotel is expected to take place during the first
quarter of 2023.
2021 Year End and 2022 Outlook
The above-mentioned drop in tourism income from the hotels of
Miramar and the expected lower valuations of both the hotel assets
and the Miramar Trade Centre will have a negative impact on the
Company's 2021 audited year end results that will be published at
the end of April 2022.
However, if during the present year the Company is able to find
a structural solution to create financial autonomy for Monte
Barreto and international tourism continues to recover, and even
more so if during 2022 the Biden administration takes steps to ease
the Cuban embargo, at least as regards family remittances and U.S.
travel, Cuba and CEIBA's liquidity position would greatly improve
which in turn could lead to a much brighter outlook for the Company
by the end of the year.
END OF ANNOUNCEMENT
For further information, please contact:
Aberdeen Standard Fund Managers Limited Tel: +44 (0)20 7463
6000
Sebastiaan Berger, Evan Bruce-Gardyne
Singer Capital Markets Tel: +44 (0)20 7496 3000
James Maxwell, , Michael Nothnagel (Corporate Finance)
James Waterlow (Sales)
JTC Fund Solutions (Guernsey) Limited Tel: +44 (0)1481
702400
www.ceibainvestments.co.uk
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END
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February 22, 2022 02:00 ET (07:00 GMT)
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