February 08, 2021
Jamaican Teas Limited (JAMT) reported a 41% increase in revenues to total $610.56 million (2019: $433.08 million). JAMT stated that this increase was “due to increased export sales which almost doubled from a year ago. The Real Estate Division contributed to the improved profits following completion of our Manor Park apartment complex. QWI continued to benefit from improved investment performance, resulting in the equity portfolio delivering a $143 million increase from dividends and capital appreciation for the quarter.”
Cost of sales also increased by 41% to $442.58 million (2019: $314.35 million), in which gross profit went up 41% to close at $167.98 million (2019: $118.73 million).
Total investment income amounted to $143.67 million, relative to total investment loss of $84.95 million reported in December 2019.
JAMT reported other losses of $2.34 million versus loss of $17.31 million reported in the prior year’s corresponding period.
Administrative expenses increased 11% to $62.57 million for the three months ended December 2020 relative to $56.46 million for the same period of 2019. Sales and Marketing costs fell 37% totaling $8.76 million (2019: $13.80 million). Management noted, “the decrease in marketing expenses for the quarter mainly reflects the cost of launching the new Caribbean Dreams Select line of tea during the year ago quarter, with no such event this year. Whilst the increase in administrative costs is due mainly to staff compensation costs and increased provisions for expected credit losses in the quarter.”
Finance cost for the period under review amounted to $7.08 million relative to $10.07 million reported in 2019. According to JAMT, “Interest expense declined during the quarter resulting from lower interest rates on borrowings at Jamaican Teas.”
Profit before taxation amounted to $230.90 million relative to pre-tax losses of $63.87 million in 2019. Tax expenses of $49.93 million was booked for the quarter compared to a tax credit of $19.40 million for the comparable quarter of 2019.
Net profit for the quarter closed at $180.97 million relative to a net loss of $44.47 million recorded for the corresponding quarter of 2019. Net profit attributable to shareholders closed the quarter at $116.60 million compared to $27.70 million booked for the same quarter of 2019.
Consequently, earnings per share totaled $0.055 compared to $0.013 for the period ended December 2020. The trailing earnings per share amounted to $0.15. The numbers of shares used in the calculations are 2,118,250,377 units. JAMT last traded on February 5, 2021 at $2.68 with a corresponding P/E ratio of 18.24 times.
JAMT stated that, “since the quarter end, Jamaican Teas purchased an additional 30 million shares in QWI, increasing its holding to 309 million shares or 22.6 percent of QWI’s issued and outstanding shares. Combined with KIW’s almost 18 percent stake, we now own 40.6 percent of QWI.”
Balance Sheet Highlights:
As at December 2020, the Company total assets amounted to $3.62 billion, a 1% decrease when compared to the $3.65 billion reported as at December 2019. This decrease was driven primarily by 12% contraction in ‘Investments’ from $1.94 billion in 2019 to $1.71 billion for the period under review. This was tempered by a 76% increase in ‘Cash and cash equivalent’ which totalled $317.82 million (2019: $180.50 million).
Shareholders’ Equity totalled $1.80 billion as at December 31, 2020 (2019: $1.58 billion), resulting in a book value per share of $0.85 (2019: $0.76).
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