Blue Power Group Limited (BPOW) for the nine months ended January 31, 2018, booked a 10% increase in revenue to total $1.15 billion compared to $1.05 billion for the same period in 2017. Revenue for the Lumber Depot increased 13% to $808.72 million, while revenue for the soap division increased 2.2% to $340.78 million. Revenue for the quarter totaled $388.30 million, 5% above last year’s corresponding quarter of $371.11 million.
Cost of sales for the period increased 15%, closing at $897.76 million up from $783.87 million the year prior. As such, gross profit amounted to $251.73 million, a decline of 5% when compared to $264.90 million recorded last year. Gross profit for the third quarter fell 7% to close at $30.38 million (2016: $37.29 million).
Administrative expenses saw a decline of 4%, to total $159.21 million (2017: $165.54 million). This resulted in profit from operations of $92.52 million, down 7% from the $99.36 million booked a year ago. The company outlined that, “The unfavourable variance is directly attributable to lower gross profit margins, especially in the Blue Power soap division which is as a result of our deliberate strategy to capture some of the export markets in the Caribbean while there has been an absence of competitive products.”
Other income, for the period, totaled $2.02 million, a decline when compared to the $3.31 million recorded for the same period last year. As such, profit before net finance costs and taxation totaled $94.54 million, compared to 2017’s $102.68 million. Finance costs of $13.05 million were recorded for the period, an increase of 294% when compared to $3.31 million in the year prior. Finance income totaled $8.64 million relative to the $20.1 million in the corresponding period in 2017, a 57% decline. The company further noted: “With the improvements in the economy, the interest rates have been trending down while the exchange rate has been appreciating, resulting in very little gain from this category of income.”
Profit before tax totaled $90.14 million compared to $119.47 million last year. The company booked tax charges for the period of $10.87 million (2017: $14.36 million).
Net Profit for the period totaled $79.27 million, a 25% decrease compared to $105.11 million the prior financial year. Net profit for the quarter amounted to $23.27 million compared to $35.60 million booked for the third quarter of 2017.
Earnings per share (EPS) for the period totaled $1.40 (2017: $1.86). EPS for the third quarter amounted to $0.41 (Q3 2017: $0.63). The twelve-month trailing EPS is $1.70. The number of shares used in our calculations amounted to 56,499,000 units.
BPOW’s stock price closed the trading period on February 27, 2017, at $34.87.
BPOW stated that “the company has been performing well on an operations basis, gaining higher overall and export sales. The decline in the gross margin in the soap business is deliberate and it is hoped that once our products are accepted in the export markets, we will be able to adjust prices upwards. The stability of the exchange rate and lower interest rates are positive for the economy and will eventually produce benefits for the company.”
Balance Sheet at a glance:
As at January 31, 2018, total assets amounted to $817.49 million, up $89.81 million from the balance of $727.67 million as at January 31, 2017. The increase in total assets was as a result of the increase in cash and cash equivalents from $261.24 million, to $315.51 million.
Shareholders’ Equity of $739.77 million was reported (2017: $654.52 million) which resulted in a book value per share of $13.09 (2017: $11.59).
Analyst Certification -This research report is for information purposes only and should not be construed as a recommendation. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.