PLIPDECO: Behind the Port, A Rising Sea of Red Flags

PLIPDECO, the state controlled port and industrial landlord at the center of Trinidad’s most strategic petro industrial zone, has been making headlines throughout 2024 and 2025, not for expansion or innovation, but for governance turmoil, tenant disputes, and mounting operational scrutiny.

In recent months, news reports have uncovered a series of escalating issues:

• Two senior managers, including the VP of Business Services, were dismissed following internal allegations of unauthorized payments and procurement irregularities, with claims of political retaliation now under legal review (Guardian, May 2025).
  

• A government commissioned scanner procurement project worth TT$4mil was flagged internally for lacking proper board approval, raising questions about transparency at the highest levels (Express, April 2025).
  

• Multiple directors, including the former acting president, have resigned abruptly amid “ongoing restructuring” and what insiders have described as boardroom gridlock (Guardian, March 2025).
  

• Meanwhile, the ArcelorMittal iron and steel facility, which defaulted on over TT$46mil in rent owed to PLIPDECO, remains shuttered. The new owner, TT Iron, has delayed its relaunch indefinitely, casting further doubt on the company’s ability to recover arrears or secure future industrial rent flows (Guardian, April 2025).
  

While these headlines point to administrative instability, they also expose structural weaknesses already present in PLIPDECO’s financials. In 2024, the company reported TT$193mil in net profit but over 79% of that was non-cash revaluation gains on property, not income from its core operations. The company is also sitting on TT$61mil in receivables, with TT$25mil past due, and an estate yielding just 4.6% on TT$2.44bil in property despite revaluation gains that outpaced actual rental growth.

The real issue isn’t whether PLIPDECO is solvent, it is. The issue is whether it is functioning as a disciplined commercial landlord and operator, or merely presenting paper profitability while its rent collection, lease enforcement, and board oversight quietly erode.

Revaluation Gains Drive Most of PLIPDECO’s Profits

In 2024, PLIPDECO reported TT$193mil in net profit, a figure that, at face value, would suggest a robust and profitable operation. However, a closer examination reveals that TT$153mil, or 79.2% of that profit, was attributed not to port throughput, tenant rent, or service revenue, but to unrealized fair value gains on its investment properties. This means that the vast majority of PLIPDECO’s earnings came from accounting revaluations rather than operational performance. Once these non cash gains are stripped away, adjusted earnings fall to just TT$40 million, offering a more sober picture of the company’s real profitability. The implications ripple through its financial metrics: adjusted return on assets (ROA) drops to 1.19%, and adjusted return on equity (ROE) to 1.32%, well below thresholds expected of capital intensive infrastructure firms.

Perhaps most concerning is the Revaluation Multiplier, which stood at 1.4× in 2024, indicating that PLIPDECO booked TT$1.40 in paper property gains for every TT$1 in actual estate rental income. This ratio is uncharacteristically high for a state-owned industrial landlord and more closely resembles speculative real estate investment trusts (REITs) that depend on asset flipping rather than recurring rent. In essence, PLIPDECO’s reported profitability does not stem from operational strength but from assumptions baked into its valuation model assumptions that are increasingly disconnected from on the ground lease enforcement, tenant arrears, and estate monetization.

Rental Quality Erodes While Receivables Balloon

Despite owning and managing over 2,100 acres of industrial estate at Point Lisas, PLIPDECO's rental income quality has steadily deteriorated both in yield and in collectability. In 2024, the company reported a rental yield of just 4.6%, down from 5.0% in 2023, despite booking TT$153mil in revaluation gains. The effective rent per acre, a key measure of how efficiently the estate is monetized, also declined, indicating that growth in asset value is not being matched by growth in income.

Perhaps most alarming is the trend in receivables, the Receivables Coverage Ratio, which measures estate revenue relative to outstanding receivables, fell from 4.72× in 2021 to just 3.07× in 2024, a clear sign that a growing portion of revenue is not being collected. As of the latest reports, PLIPDECO was carrying TT$61.3mil in trade receivables, of which TT$25.4mik was past due and TT$9.7mik already impaired. In effect, PLIPDECO is continuing to book rent it cannot collect, propping up earnings and valuation with non-performing receivables.

This issue is not theoretical, it is supported by real world events, ArcelorMittal, once a major tenant, defaulted on TT$46.4mil in unpaid rent, and its successor, TT Iron, has yet to operationalize the plant it acquired. Meanwhile, media reports have confirmed that multiple leases remain expired or in legal limbo, even as PLIPDECO continues to revalue and recognize income from these properties. The result is a dangerous mismatch between accounting based profitability and real cash flow performance, with rising exposure to tenant default, uncollectable revenue, and valuation distortion.

Lease Expiry and Asset Valuation Risks

PLIPDECO’s TT$2.44bil valuation of its investment properties is built on the assumption that tenants will stay long-term and renew their leases for another 30 yrs. This assumption is used to calculate future rental income and support high property values in the company’s financial statements. But both the financial disclosures and recent news reports show that this doesn’t reflect what’s really happening.

The company doesn’t publish any lease maturity schedule, so it’s unclear when leases expire or how many are coming due. Yet as of 2025, at least 9 major industrial leases are still unrenewed. Tenants are continuing to use the land, but without updated or signed lease agreements. Despite this, PLIPDECO keeps recording gains on these properties as if they’re locked in for decades. One clear example is the ArcelorMittal site. That tenant defaulted on more than TT$46mil in rent (when they left). The land is now held by TT Iron, which hasn’t started operations. The property earns no income but is still counted in the company's valuation. This shows how PLIPDECO is recognizing value on properties that aren’t producing revenue and may not have secure legal terms.

Back in 2021, the company’s auditor specifically flagged this as a key risk, pointing out that lease renewals were assumed, not guaranteed. Since then, PLIPDECO hasn’t updated the public on the status of these leases, and it no longer highlights this issue in its audit reports. If more tenants fail to renew, or if rents are renegotiated downward, the company may need to lower its property values and take a hit to earnings. In simple terms, PLIPDECO is counting on future rental income that might not happen.

Source - PLD 2021 Financials

Governance, Board Instability, Dividends and Internal Control Failures

The recent news reports between 2024 and 2025 highlights that PLIPDECO faced serious governance and internal control issues that cast doubt on its ability to manage its TT$2.44bil property portfolio with reliability or transparency. Two senior executives, including the VP of Business Services, were terminated under legal dispute for allegedly approving unauthorized payments and making irregular salary adjustments. At the same time, a TT$4mil scanner procurement was flagged by directors for bypassing board oversight, signaling deeper issues in procurement controls. These events coincided with the resignation of at least 4 directors, including former acting president Dr. Averne Pantin, amid growing boardroom tension. Despite all this, the company publicly claimed “nothing abnormal” was happening, even as internal investigations were confirmed and board members cited political interference and enforcement lapses on key leases.

These internal problems raise direct questions about operational discipline, especially in enforcing lease terms and ensuring financial oversight. That concern is backed up in the numbers: PLIPDECO reported TT$61.3mil in trade receivables in 2024, with TT$25.4mil past due and TT$9.7 million impaired, yet, continued to book upward property revaluations that made up 79% of net profit for the year. This mismatch between rising asset values and declining collection performance is made worse by the company’s erratic dividend history. From 2019 to 2023, the company maintained relatively modest payouts, ranging between 10¢ and 17¢ per share, even in years with strong reported profits. Then in 2024, despite profit surging to TT$193mil, largely driven by unrealized revaluation gains, the dividend jumped dramatically to 40¢ per share, totaling TT$15.85mil. While this appears generous, it raises concerns about sustainability, especially considering that adjusted earnings (excluding revaluation gains) were closer to TT$40mil. In prior years, such as 2023, the company declared a significantly lower 10¢ dividend despite modest net income and negative free cash flow. This inconsistency suggests that PLIPDECO’s dividend decisions are not guided by stable, recurring cash generation but rather by optics or opportunistic signals. It also raises the possibility that even management does not fully trust the long-term reliability of the company’s reported earnings.

Altogether, this pattern, governance breakdown, tenant arrears, overstated valuations, and unstable dividends, undermines investor trust. You cannot justify a TT$2.44bil estate on long-term projections when board oversight is weak, lease enforcement is inconsistent, and management is pulling back on returns to shareholders.

Operational Metrics Reveal Structural Stagnation

While the declare dividend in the 2024 report looks promising and the operating numbers look strong at first glance, when you break them down, they reveal a company that isn’t growing in a meaningful or sustainable way. For example, the company’s adjusted operating margin was 16.6%, and its Debt Service Coverage Ratio (DSCR) was 2.17×, meaning it had more than enough cash to meet its debt obligations. It also posted a capex coverage ratio of 5.04×, which usually suggests there’s plenty of cash left after capital spending. This would explain the significant boost in its FCF and also its higher declared dividend. But this isn’t the full story.

That high capex coverage doesn’t mean PLIPDECO is investing aggressively or improving its operations, it just means it spent very little. In 2024, capex was only TT$20.6mil, which is low for a company managing a major port and a massive industrial estate. This suggests that PLIPDECO might be delaying maintenance, upgrading too slowly, or simply not investing enough in its future infrastructure. If these facilities aren’t being improved, they may lose value or competitiveness over time (something confirmed by the various news reports).

Additionally, while container activity at the port is increasing, the revenue earned per container (TT$1,180 per TEU) has hardly moved in recent years. This means that PLIPDECO is moving more cargo, but not making more money per shipment. It indicates that the company has limited pricing power, or it’s not adding enough value to justify charging more. In a well performing business, growing volume should come with rising income per unit but that’s not happening here. To be fair however, while revenue per container has remained flat, indicating limited pricing power, some recent customs related delays, raise concerns that operational bottlenecks outside PLIPDECO’s control may still be affecting cargo flow, client costs, and reputational risk.

Overall, while the headline figures suggest stability, a deeper look shows that PLIPDECO is underinvesting, failing to increase revenue efficiency, and not turning higher activity into stronger returns. The company has the physical assets and volume, but it’s not unlocking more value from them, pointing to a business that may be treading water rather than moving forward.

PLIPDECO is not facing an immediate liquidity crisis, nor is it under financial distress by traditional measures. It has ample cash, low debt, and a large industrial footprint. But beneath that surface lies a fragile foundation built on accounting assumptions rather than operating strength. Its TT$2.44bil valuation is heavily reliant on fair value gains from investment properties, many of which lack renewed leases or active tenants. The company's largest source of reported profit in recent years has come not from rent collection or port operations, but from revaluing assets that may be legally uncertain or commercially underperforming.

Rent collection is weakening, with over TT$25mil past due and nearly TT$10mil already impaired. Lease enforcement is inconsistent, with multiple expired leases still contributing to book value. Operational performance is flat, with revenue per container showing no meaningful improvement despite rising volumes. Governance has deteriorated, marked by board resignations, procurement disputes, and internal investigations, all while management insists nothing is wrong. Meanwhile, PLIPDECO has swung between conservative and overly generous dividend decisions, further highlighting the absence of a stable financial strategy.

Taken together, this paints the picture of a company whose apparent financial health masks deep vulnerabilities. If the revaluation cycle turns, PLIPDECO could face significant asset write downs and a sudden collapse in earnings quality. To restore credibility and resilience, PLIPDECO must move quickly to improve lease transparency, tighten governance, enforce rental contracts, and align reported profits with real, recurring performance. Otherwise, the next phase for this asset heavy landlord may not be one of growth but of painful correction.