CAR reports 2% increase in nine months net profits

Carreras Limited (CAR), for the nine months ended December 30, 2018 reported Operating Revenue of $9.86 billion, 3% more than the $9.53 billion booked in 2017. Revenue for the quarter increased by 2% compared to the corresponding quarter moving to $3.55 billion in 2018 from $3.47 billion in 2017.

Cost of Operating Revenue also increased year over year by 5%, amounting to $4.96 billion from $4.74 billion.

As such, Gross Operating Profit went up by 2% to total $4.91 billion relative to the $4.79 billion in 2017.

Other Operating Income decreased 15% moving from $56.61 million in 2018 to $48.31 million.

Administrative, distribution and marketing expenses increased 3% to total $1.54 billion (2017: $1.50 million). The company stated that this was attributable to “heightened investments in or brands as well as increased costs for security and motor vehicle running costs, including fuel. The company remains vigilant in seeking opportunities to reduce overheads.”

Profit before Income Tax was recorded at $3.41 billion in 2017 relative to $3.35 billion in 2017. Taxation of $856.03 million was incurred for the period (2017: $837.52 million).

Net Profit for the six months increased 2% to $2.55 billion relative from $2.51 billion booked in 2017. Net Profit for the second quarter saw a 4% decline amounting to $810.93 million compared to the $842.16 million reported in the third quarter 2017 period.

Total Comprehensive Income attributable to shareholders for the period closed at $2.55 billion compared to $2.51 billion reported for the corresponding quarter in 2017.

The Earnings per share (EPS) for the period was $0.53 as compared to $0.52 for the corresponding period of last year, while EPS for the quarter amounted to $0.17 (2017: $0.17). The twelve month trailing EPS amounted to $0.73. The number of shares used in the computations amounted to 4,854,400,000 units. CAR closed the trading period on February 14, 2019 at $9.50.

CAR noted, “Having recorded revenue growth and modest increases in profitability since the beginning of the 2018/19 financial year, we remain cautiously optimistic that this trend will continue into the last quarter of the financial year. This positive trend along with the investments in our brands, our talented and dedicated team and our continued thrust to satisfy consumer moments augers well for the long-term sustainability of the business.”

Management stated, “The company also continued to impress upon the government, the need for a sustainable excise strategy in light of the direct relationship between frequent and excessive increases in taxes and the rise of illicit trade in cigarettes. On several occasions we have sought to draw this parallel to the 21.4% excise increase implemented on March 13, 2017, and an observed shifts of volumes from the legal trade to the illegal trade, and its impact on Government revenues. It is therefore critical to highlight that we are at definitive point, where any further increases in excise will only serve to add greater fuel to the illegal trade, which will no doubt rebound to the detriment of the Government’s tax collection and regulation efforts. We also remain committed to supporting the initiatives by the authorities to stamp out the illicit trade in cigarettes and continue the call for stronger border protection and port monitoring towards stemming the influx of the illegal products into our market.”

The company will continue to implement initiatives to stabilize our sales volumes, as well as to recover volumes which were transferred from legal trade and channeled directly to the illicit trade as result of the excise increase.

Balance Sheet at a glance:

Total Assets amounted to $3.61 billion as at December 30, 2018, up $747.85 million (17%) from $4.36 billion reported in 2017. This was mainly due to a significant decline of $791.94 million in Cash and Cash equivalents to end the period at $1.95 billion (2017: $2.74 billion).

Shareholders’ Equity attributable to stockholders of parent amounted $1.34 billion (2017: $2.02 billion) with book value per share of $0.28 (2017: $0.42).

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2019-02-15T00:15:51+00:00