Ceiba trading statement reflects Trump bluster – One of the many fights that Trump is picking with the rest of the world is with Cuba, where a gradual warming of relations under Obama has turned decisively frosty. As announced on 29 May 2019, Ceiba’s NAV at 31 March 2019 was US$1.5073 (31 December 2018 audited NAV: US$1.4937). This increase reflects US$1.9 million of net income recognised during the quarter. However, as a result of the strengthening of the British Pound during this period, the NAV expressed in sterling was lower, at GBP1.1547, than as at 31 December 2018, GBP1.1770.
Strengthening of the US Cuban Embargo
The recent steps taken by the Trump administration to further strengthen the US Cuban Embargo, which has included limiting remittances, further restricting travel by US persons to Cuba and allowing Title III of the extraterritorial Helms-Burton Act to come into force, have resulted in a decline in US travel to the island and are expected to have a negative impact on the Cuban economy. Ceiba’s board says it is highly encouraged that Cuba continues to allow the timely transfer of hard currency to the foreign shareholders of the Cuban joint ventures in which the company participates. The company is apparently also grateful for the immediate support provided by the European Union and various other countries in publicly repeating their long-standing determination that the application of Title III of the Helms-Burton Act is contrary to international law and confirming support for the companies under their jurisdiction having legitimate investments in Cuba.
The Spanish Cuban Debt Conversion Programme
Two Cuban joint venture companies in which CEIBA participates were awarded an aggregate amount of US$18.25 million under the Spanish Cuban Debt Conversion Programme. TosCuba S.A. (in which CEIBA has an economic interest of 40%) was awarded US$10 million in connection with the construction of the Meliã Trinidad Playa Hotel near Trinidad, Cuba, and Miramar S.A. (in which CEIBA has a 32.5% economic interest) was awarded US$8.25 million in connection with the Meliã Habana expansion project.
Under these awards, local currency invoices relating to services and materials received in Cuba in the course of the construction of the projects will be paid on behalf of the Cuban joint venture companies from the programme funds, thereby reducing the financing that CEIBA may have otherwise needed to provide. There is no obligation to reimburse funds awarded under the programme.
In May 2019, TosCuba S.A. received the first US$2.5 million tranche of its award.
John Herring, chairman of CEIBA Investments Limited, said: “We are pleased by the Q1 results of the Company and the continuing progress being made with respect to our investment programmes. We are confident, notwithstanding the adverse recent steps taken by the US administration towards Cuba, that CEIBA’s growing investment programmes will prove to be mutually beneficial to the company and to the Cuban economy, Cuba and its people.”
CBA : Ceiba trading statement reflects Trump bluster