ELITE reports 87% decline in year end net profit

August 17, 2020

Elite Diagnostic Limited (ELITE) for the year ended June 30, 2020 booked an 8% increase in revenue to total $439.26 million  compared to $404.87 million in 2019. ELITE noted, “Despite the increase in revenue, the company experienced challenges with the St Ann location, equipment breakdown and the effects of Covid-19. With the delay of a fully operational St Ann location and its associated expenses, net profit was significantly impacted.” Revenue for the fourth quarter fell by 20% to $91.97 million (2019: $115.14 million). Management highlighted, “Revenues for the 4th quarter were impacted by Covid-19 as we noted a decrease in demand for imaging services as well as a reduction in our operating hours.”

Direct costs for the year increased 27%, closing at $160.91 million, up from $126.26 million reported the prior year, while for the fourth quarter there was a 16% increase in direct costs, closing at $34.23 million (2019: $29.61 million).

As such, gross profit for the year amounted to $278.35 million, relative to $278.61 million in 2019. However, gross profit for the fourth quarter decreased 32% from $85.53 million in 2019 to $57.74 million for the corresponding quarter in 2020.

Administrative expenses climbed 18% for the year to total $174.01 million (2019: $147.98 million). Depreciation and amortization increased 34% to total $74.71 million relative to the $55.83 million booked in 2019. This resulted in profit from operations of $29.63 million for year ended June 30, 2020, a 61% decrease relative to $75.02 million booked a year ago.

ELITE indicated, “The company experienced some equipment breakdowns during the 4th quarter which also added to the decline in revenue. The effects of Covid-19 were keenly felt in the first two months of 4th quarter however, the latter part of the quarter saw business returning to near normal activity at the two Kingston locations. The St. Ann location became fully operational in July 2020 after significant delays in having our key modalities available.”

Finance cost for the twelve months ended June 30, 2020 totaled $22.57 million, an increase of 12% when compared to the $20.08 million recorded for the same period last year, while exchange loss amounted to $465,000 compared to a loss of $3.12 million the prior year.

Profit before tax for the year end amounted to  $6.59 million compared to $51.82 million recorded last year, a decline of 87% year over year. Loss before tax for the quarter amounted to $12.48 million relative to a profit before tax of $24.64 million booked for the prior year’s corresponding quarter.

Net profit for the period totaled $6.59 million relative to $51.82 million recorded the prior financial year. Net loss for the quarter amounted to $12.48 million, compared to a net profit of $24.64 million booked for the same quarter in 2019.

Earnings per share (EPS) for the period totaled $0.02 (2019: $0.15). Loss per share (LPS) for the fourth quarter amounted to $0.04 relative to an EPS of $0.07 recorded for the corresponding quarter of 2019. The number of shares used in our calculations amounted to 353,400,000 units. ELITE’s stock price closed the trading period on August 17, 2020, at $3.15.

ELITE stated that, “With the MRI and CT machines now both operational at the St. Ann location, the company’s operating capacity is now at desired levels. We remain cautiously optimistic for the near future.”

Balance Sheet at a glance:

As at June 30 2020, total assets amounted to $674.15 million, up 2% from the balance of $664.07 million as at the previous year. The improvement in total assets was as a result of the 53% increase in ‘Receivables’ which closed at $38.71 million relative to $25.24 million as at June 30, 2019. Property plant and equipment also contributed to in movement in the asset base with a 3% or 14.53 million increase to $576.29 million (2019: $561.75 million). This was tempered by a 30% increase in ‘Cash and Cash Equivalents’ from $76.42 million in 2019 to $53.85 million in 2020.

Shareholders’ equity of $457.80 million was reported (2019: $451.21 million) which resulted in a book value per share of $1.30 (2019: $1.28).

 

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.

2020-08-17T20:38:53-05:00