February 15, 2021

Carreras Limited, for the nine months ended December 31, 2020, reported Operating Revenue of $10.16 billion, a 1% decline relative to $10.28 billion booked in 2020. Revenue for the quarter closed at $4 billion, compared to $3.64 billion reported for the second quarter of 2019. The company highlighted that, “This Q3 performance is building upon the recovery uptick, which commenced in Q2 post the initial impact of the COVID-19 pandemic on the supply chain. This success is the result of the efforts of a devoted team. The Company’s Q3 performance went a long way in reducing the 1% decline in the year-to-date (YTD) operating revenue of $10.159 billion, relative to the same period last year.”

Cost of Operating Revenue rose year over year by 0.4%, amounting to $5.22 billion from $5.20 billion. As such, Gross Operating Profit fell by 3% to total $4.94 billion relative to the $5.08 billion in 2019. Operating profit for the quarter amounted to $1.91 billion relative to $1.77 billion booked for the same quarter of 2019. Other Operating Income increased 58% moving from $28.355 million in 2019 to $44.74 million.

Administrative, distribution and marketing expenses decreased 20% to total $1.51 billion (2019: $1.88 billion). Management stated, “The Company was able to capitalise on benefits in the route-to-market distribution network through significant decreases in related party costs as well as the reinforcement of performance initiatives employed by management.”

Interest income for the period amounted to $31.73 million, a 36% decline from the $49.49 million booked in 2019. Interest expense for the nine-month period closed at $15.48 million relative to $8.46 million in 2019.

Profit before Income Tax closed the period at $3.48 billion relative to $3.28 billion in 2019. Taxation of $886.74 million was incurred for the nine months relative to $825.86 million reported a year earlier. Consequently, Net Profit for the nine months increased to $2.59 billion relative to $2.45 billion booked in 2019. Net profit for the quarter increased to $1.03 billion versus $704.10 million booked for the third quarter of 2019.

The Earnings per share (EPS) for the period was $0.53 compared to $0.50 for the corresponding period of last year. EPS for the quarter amounted to $0.21 (2019: $0.15). The twelve-month trailing EPS amounted to $0.77. The number of shares used in the computations amounted to 4,854,400,000 units. CAR’s stock price last traded on February 12, 2021 at $6.86 with a corresponding P/E ratio of 8.93 times.

CAR also noted that, “We anticipate continued delivery of solid results based on our strong performance and track record thus far. We remain undaunted in fullfilling the agreed mandate of our shareholders to deliver value in a responsible and sustainable manner.”

Balance Sheet Highlights:

Total Assets amounted to $4.83 billion as at December 31, 2020, 16% up from $4.18 billion reported in 2019. This was mainly due to a 107% increase in Inventories which closed at $513.39 million in contrast to $248.19 million as at December 31, 2019.

Shareholders’ Equity attributable to stockholders of parent amounted $1.99 billion (2019: $1.41 billion) with book value per share of $0.41 (2019: $0.29).

Disclaimer:

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.