May 10, 2021
Cargo Handlers Limited (CHL), for the six months ended March 31, 2021, posted revenue totaling $148.81 million versus $191.37 million booked in 2020. Revenue for the quarter contracted 36% to $67.10 million versus $104.26 million booked for the same quarter of 2020.
No cost of sales was reported for the period, in contrast to the $5.74 million posted in the corresponding period last year. As such, CHL recorded gross profit of $148.81 million (2020: $185.63 million) for the six months ended March 31, 2021. Gross profit for the quarter closed at $67.10 million versus $100.22 million for the same quarter of 2020.
Gain on exchange closed at $6.32 million relative to a gain of $9.46 million recorded in the prior corresponding quarter. CHL booked other income for the six months period of $2.06 million (2020: $75,000).
The Company reported a 3% decline in administrative expenses to $13.31 million (2020: $13.76 million), while other operating expenses reflected a decrease of 20% to $67.20 million (2020: $84.28 million).
Consequently, CHL recorded an operating profit of $76.68 million, down 21% compared with $97.13 million reported for the corresponding period in 2020. Operating profit for the second quarter closed at $38.95 million (2020: $55.76 million).
The Company reported finance cost of $577,506 for the period; this compares to the finance cost of $912,576 for the same period in 2020. Interest income year to date amounted to $813,431 (2020: $591,124).
Profit before taxation fell 14% to $83.17 million versus $96.80 million documented for the same period in 2020. Pre-tax profits for the second quarter closed at $45.42 million (2020: $55.69 million).
Net profit fell 25% to $63.32 million (2020: $84.56 million) following taxation $19.85 million (2020: $12.25 million). Likewise, net profit for the quarter decreased by 27% to $35.46 million relative to $48.65 million in the previous corresponding quarter.
Earnings per share (EPS) for the six months amounted to $0.15 (2020: $0.20). The EPS for the second quarter was $0.085 (2020: $0.117). The twelve-month trailing EPS amounted to $0.21. CHL stock price closed the trading period on May 10, 2021 at a price of $7.51 with a corresponding P/E ratio of 36.18 times.
CHL noted, “more than a year into the pandemic, the global containerized market is beginning to show signs of rebounding and according to the World Trade Organization (WTO), it is anticipated that surging US demand for goods in goods in 2021 will begin to drive the trade. Our immediate operating environment is however still being affected by the uncertainty of the pandemic and a return to pre-COVID containerized cargo volumes may not occur before the hospitality sector is once again fully engaged.”
Additionally, CHL indicated, “as Jamaica’s tourism industry slowly regains lost momentum, major Florida based Cruise Lines are now beginning to focus on Jamaica as a possible home-port destination for restarting sailing by the middle of this year. This development coupled with the global vaccine roll-out already in high gear could be the precursor to our return to a sense of normality.”
Balance Sheet at a Glance:
As at March 31, 2021 ‘Total assets’ fell by 1% to $604.80 million (2020: $608 million). This decline was primarily driven by ‘Receivables’, which amounted to $60.19 million (2020: $183.23 million). The overall movement in the asset base was however tempered by ‘Investments’ which amounted to $111.40 million (2020: nil).
Shareholders’ equity as at March 31, 2021 amounted to $538 million (2020: $511.54 million) resulting in a book value per share of $1.29 (2020: $1.23).
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer(s) or securities as at the date of this report. 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.