April 13, 2023

Paramount Trading (Jamaica) Limited (PTL) for the nine months ended February 28, 2023:

Revenue increased 32% to $1.63 billion (2022: $1.23 billion). For the quarter, revenue declined 6% to $438.11 million (2022: $463.96 million).

Direct expenses increased 30% to $1.09 billion (2022: $835.23 million) Consequently, gross profit increased 37% to $548.67 million (2022: $399.21 million). For the quarter, gross profit declined 11% to $140.70 million (2022: $158.19 million).

Other operating income increased 6% to $35.71 million (2022: $33.57 million) while total operating expenses increased 18% to $344.33 million (2022: $292.31 million).

Operating profit increased 71% to $240.05 million (2022: $140.47 million). For the quarter, operating profit declined 25% to $47.57 million (2022: $63.69 million).

Interest income declined 44% to $1.55 million (2022: $2.75 million), while finance costs declined 1% to $34.49 million (2022: $34.72 million).

Pre-tax profit increased 91% to $207.11 million (2022: $108.51 million). Tax charges increased 107% to $28.06 million (2022: $13.56 million).

As such, net profit increased 89% to $179.04 million (2022: $94.95 million). For the quarter, net profit declined 36% to $30.37 million (2022: $47.44 million).

Earnings per share (EPS) amounted to $0.116 (2022: $0.062). For the quarter, EPS amounted to $0.020 (2022: $0.031). The trailing twelve-month EPS amounted to $0.168. The number of shares used in our calculations is 1,542,467,080 units. PTL stock price closed the trading period at a price of $2.18 on April 12, 2023, with a corresponding P/E ratio of 13x.

Management noted that the improved performance over the nine-month period was achieved by employment of a robust growth strategy, digital transformation initiatives and positively pivoting supply chain logistic issues.

Balance Sheet Highlights:

Total assets as at February 28, 2023 increased 7% to $1.91 billion (2022: $1.79 billion). The main contributor to this was the 44% increase in ‘Inventories’ which closed at $726.81 million (2022: $504.97 million).

Shareholders’ equity as at February 28, 2023 increased 31% to $1.09 billion (2022: $833.81 million), resulting in a book value per share of $0.71 (2022: $0.54).

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