BPOW reports 26% decrease in first quarter net profits

Date: August 27, 2019

Blue Power Group Limited (BPOW) for the three months ended July 31, 2019 revenues increased by 2%, year over year, totaling $443.91 million (2018: $436.45 million) as sales from the Lumber division increased by 9%, while sales from the Blue Power division fell by 14%.

Cost of Sales for the quarter showed an increase of 4%, moving from $332.69 million to $345.20 million. As such, Gross Profit amounted to $98.71 million, a decrease of 5% on the $103.75 million recorded for the first three month ended July 31, 2018.

Administrative Expenses for the quarter was relatively unchanged, totaling $58.32 million relative to last year’s $58.30 million.

BPOW reported $727,448 for Other Income for the first quarter relative to nil recorded for the corresponding period in 2018.

Finance Cost of $1.24 million was recorded for the first quarter compared to $1.63 million in the year prior, while Finance Income totalled $10.84 million relative to the $24.64 million for the same quarter in 2018. Management noted, “due entirely to a reduction in the level of foreign exchange earnings when compared to the previous year.” Consequently, Profit before taxation reflected a 26% decline year over year to $50.72 million versus $68.47 million booked for the prior year’s corresponding quarter.

BPOW stated that, “The first quarter saw a decline in export sales as a result of a slow down in orders from Guyana orders and the United States. . We have also noticed significant activity by our competitors in both those markets and are providing appropriate  support to our distributors.”

After taxation of $6.03 million (2018: $8.27 million), Net Profit for the first quarter amounted to $44.69 million compared to $60.20 million, a 26% decline.

Earnings per share for the quarter totaled $0.08 (2018: $0.11), while for the trailing twelve months EPS was $0.15. The number of shares used in this calculation was 564,990,000 Notably, BPOW’s stock price closed the trading period on August 27, 2019 at a price of $9.48.

Management noted, “We have also begun the production of two new products lines. One range will developed for Trinidad and Tobago entity. The other product line is a beauty soap for a United States company concentrating on supplying the diaspora from the Dominican Republic. We hope both of these products will help to improve our export performance.”

BPOW further advised, “At the Extraordinary General Meeting held on August 14, 2019 resolutions relating to the separation of the two segments of the Group were approved. Shareholders will soon get their shares in Lumber Depot Limited which has already been formed after the takeover of the assets and liabilities of the Lumber Deport division. In addition, the company plans to raise additional funds through an IPO.”

Balance Sheet at a glance:

As at July 31, 2019, total assets amounted to $1.08 billion, up $167.84 million from the balance of $907.52 million as at July 31, 2018. The largest contributor to the increase in assets were ‘Investment’ and ‘Inventories’ which closed the quarter at $265.78 million (2018: $158.40 million) and $302.38 million (2018: $264.29 million) respectively.

Shareholders’ Equity increased by approximately 16% amounting to $942.34 million (2018: $812.20 million) with a book value per share of $1.67 (2018: $1.44).

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