BPOW reports a 19% decline in six months net profit

Blue Power Group Limited (BPOW) for the six months ended October 31, 2017 booked a 12% increase in revenue to total $761.19 million compared to $667.67 million for the same period in 2016. Sales from the Lumber division climbed to $544.35 million, 16% higher than $468.68 million, while sales in the Soap division increased by 4% to close the period at $216.84 million relative to $208.99 million in 2016. Revenue for the quarter totalled $380.65 million, 12% above last year’s corresponding quarter of $338.97 million.

The company outlined that, “export sales continued to outpace increases in the domestic market with an improvement of 33% over the same quarter in the previous year and 30% for the half year. Performance of the hotel size soap continued to show improvement with an increase of 32% for the half year.

Cost of sales for the period showed an increase of 18%, moving from $505.53 million to $595.59 million. Despite this increase, gross profit amounted to $165.60 million, a decrease of 4% when compared to $172.14 million recorded last year. Gross profit for the second quarter fell 14% to close at $77.51 million (2016: $89.76 million).

Administrative expenses saw a decline of 6%, to total $103.45 million (2016: $110.07 million). As such profit from operations totaled $62.14 million, a marginal increase when compared to 2016’s $62.07 million. Profit from operations for the second quarter amounted to $21.46 million (2016: $28.63 million).

Other income, for the period totalled $1.78 million a significant decline when compared to the $2.41 million recorded for the same period last year.

Finance costs of $7.62 million were recorded for the period, an increase of 257% when compared to $2.14 million in the year prior. Finance income totalled $7.33 million relative to $16.71 million in the corresponding period in 2016, a 56% decline.

Profit before tax totalled $63.63 million compared to $79.06 million last year. The company booked tax charges for the period of $7.62 million (2016: $9.55 million).

Net Profit for the period totalled $56 million, a 19% decrease compared to $69.50 million the prior financial year. Net profit for the quarter amounted to $17.53 million compared to $32.10 million booked for the second quarter of 2016. Management noted, “the main reason for the negative variance is that the revaluation of the Jamaican currency which, taking into account our approach of holding surplus funds in US currency, contributed to the negative variance when comparing the two periods.” “Even with its share of exchange losses, the Lumber Depot Division is showing an excellent performance for both the quarter and the half year, with the results being close to its results last year in the same periods.”

Earnings per share (EPS) for the period totalled $0.99 (2016: $1.23). EPS for the second quarter amounted to $0.31 relative to $0.57. The twelve-month trailing EPS is $1.92. The number of share used in our calculations amounted to 56,499,000 units. BPOW’s stock price close the trading period on November 22, 2017 at $44.03.

Additionally, BPOW noted, “with respect to the acquisition of soap manufacturing equipment from a subsidiary of Seprod, we have felt no significant impact on the financial results so far although we hope to have the Export Division of Seprod begin marketing their two brands which would be made by us.”


Balance Sheet at a glance:

As at October 31, 2017, total assets amounted to $807.06 million, up $97.90 million from the balance of $709.17 million as at October 2016. The increase in total assets was as a result of the increase in cash and cash equivalents from $247.52 million, to $317.77 million.

Shareholders’ Equity of $716.50 million was reported (2016: $618.92 million) which resulted in a book value per share of $12.68 (2016: $10.95).



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