The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas Waste yesterday said it was taking “a wait and see “ approach to Value-Added Tax (VAT), with its “biggest concerns” centred on its $2 million-plus receivables and fears it may have to ‘carry’ non-paying customers.

Francisco de Cardenas, the BISX-listed waste services provider’s managing director, said its systems and personnel were “all set” to cope with the new tax, its worries now focused on how its customer base will react.

Speaking after Bahamas Waste enjoyed an 8.9 per cent net income increase for the first nine months of 2014, Mr de Cardenas said he was concerned that VAT might exacerbate already-high accounts receivables.

These represent debts, or monies owed to the company, by its customers, and 7.5 per cent VAT will further increase the cost of Bahamas Waste’s services - thus making it even more difficult for some to remain current.

Bahamas Waste’s receivables actually dropped by 9.6 per cent during the nine months to end-September 2014, falling from $2.465 million at year-end 2013 to $2.229 million.

However, Mr de Cardenas disclosed to Tribune Business that Bahamas Waste was also concerned that it might have to ‘front’, or pay VAT on behalf of late or non-paying customers, thus imposing a significant tax burden on itself.

“It’s difficult to know what’s going to happen,” the Bahamas Waste chief said of VAT. “We, just like everyone else, have difficulties getting receivables, and that’s one of our biggest concerns.”

As to the possibility Bahamas Waste might have to pay VAT owed by non-paying customers, he added: “That’s, again, another one of our concerns. It’s difficult to get a good grip on what’s going to happen. I think it really is just a wait and see.

“We are a service provider, and as long as we provide the service, and provide a good service, I don’t think there will be much of a fallout.”

Mr de Cardenas, though, told Tribune Business that in return for the increased tax burden imposed on the Bahamian people, the Government had to demonstrate accountability with its spending.

“It really is going to be important that there’s accountability on the Government end,” he said, “as they can’t just tax the people. There’s got to be some accountability.”

Bahamas Waste enjoyed a slight year-over-year rise in net income for the nine months to end-September, increasing its bottom line from $521,558 to $567,351.

Top-line sales and revenues were up by 3.4 per cent for the period, standing at $8.134 million compared to $7.866 million. With the cost of sales relatively flat, Bahamas Waste saw its gross profits rise by 8.7 per cent, from $2.322 million to $2.524 million.

However, the BISX-listed company saw its operating expenses rise by more than $150,000 year-over-year, or 8.8 per cent. These grew from $1.788 million to $1.945 million.

Mr de Cardenas told Tribune Business that Bahamas Waste’s business was performing “as well as can be expected” given the prevailing economic environment.

“Unfortunately, I’m not seeing anything substantial on the horizon, so again it’s one of those things where we have to continue to focus on controlling our costs and improving our efficiencies. That’s our goal,” he said of the company’s 2015 outlook.

On the operational front, Mr de Cardenas said Bahamas Waste’s cardboard recycling venture was “starting to pick up nicely, although still struggling a little bit”.

He added that Bahamas Waste had exported one recycled cardboard shipment in October, and achievement it hopes to match in both November and December.

As for the company’s biodiesel/waste vegetable oil recycling business, Mr de Cardenas said: “We’re having more successes than failures, which is a good sign. We will get there, and hopefully we will celebrate soon.”

He said Bahamas Waste was attracting new waste vegetable oil suppliers every week, with the Christmas season also set to boost volumes.