Williams Industries Inc.
Chairman’s Report to the Shareholders
For the year ended December 31 st 2008
timely backup and engineering services are concerned. Although IFL pre qualified for the supply of a new RO plant at the Belle and was the low bidder for the leachate treatment plant at Greenland in 2007 neither of these resulted in business in 2008.
As I reported last year, we are convinced that several Membrane Bio Reactor installations to treat sewage and produce pure water for irrigation etc. along the West coast would be a far better and less disruptive solution than a trunk sewer. We believe that the construction work required to lay a trunk sewer along the West Coast will create havoc with the ever increasing traffic in Barbados while multiple MBR plants will cause far less disruption and recover the water for irrigation that the island cannot afford to throw away at sea.
Equipment rental and sales
Overall sales for Williams Equipment held virtually even in 2008 but profit was down by 10.2% from 2007. Weaker sales in the rentals department and smaller margins on equipment sales contributed to this decline. Increased fuel and freight cost also drove up operating expenses while rental rates were not raised to match these increases. A new computer system was also implemented in July in an effort to better manage stock, rentals and point of sales processes and despite the initial cost and challenges that followed the decision appears to be bearing fruit. In addition the business will be opening a new branch in Six Roads in 2009 and is confident this will broaden its market share and customer base even though the initial startup cost will have a negative impact on the company’s performance in 2009. The outlook for 2009 is similar to that of other businesses that depend on the construction sector. The company will not be able to maintain its sales in the coming year.
Tourism related business
Our tourism related investments in Barbados continued to under perform in 2008. Coastal Holdings Limited which operates the Harbour Master and five day charter sailing catamarans operated under severe competition for the reduced number of tourists as more catamarans entered the business. This investment is not controlled by Williams Industries Inc. since we only own 11 % so we would like to sell our shares if the right offer was received.
Our investments in Premium Hotels Investments Ltd, (Almond Smugglers Cove), Garrison Realty Ltd, Honeywell Investments Ltd and Sandy Coast Ltd. in St. Lucia have all became heavy burdens on Caribbean Metals Ltd.(CML). These investments increased the finance cost and overhead expenses of CML by over EC$1,000,000 during 2008. In addition Williams Industries Inc. provided $4,929,759 in its 2008 consolidated accounts for anticipated losses associated with these investments. We will be making a determined effort in 2009 to sort these out and stop the haemorrhage.
Warrens Telecoms Ltd.
During 2008, Digicel continued to increase its market share in Barbados. Sales increased by 7.2% while profit after tax increased by 19.3%. During 2008 Warrens Telecoms Ltd. repaid WII $3,642,000 of the $6,000,000 which we invested in that company. Indications are that we will be repaid the remainder of our investment in 2009 and we are likely to receive a dividend as well. This investment is exceeding our expectations and we expect it to continue to do so.
