August 18, 2020
K.L.E Group Limited (KLE), for the six months ended June 30, 2020, the Company recorded a total revenue of $80.45 million (2019: $101.87 million), representing a 21% decrease in revenue. For the second quarter revenues decreased 85% to total $7.78 million (2019: $52.15 million).
Cost of sales went down by 16% to $24.64 million compared to the $29.36 million reported in 2019; as a result, gross profit was down 23% to total $55.81 million relative to $72.51 million in 2019. While gross profit for the quarter decreased by 86% to total $5.24 million compared to $36.78 million in 2019.
Other operating income declined by 65% to $3.60 million relative to $10.36 million. In addition, administrative and other expenses increased by 20% from $72.69 million for the first half of 2019 to $87.53 million for the same period of 2020. Management noted, “For the second quarter expenses were significantly reduced as the company went into cost saving mode in reflection to the severe impact of the pandemic and the declining revenue. Average expenses for the quarter declined by 70 – 80%. Salaries and wages saw the biggest decline of 87%, utilities declined by 60%. Some of the expense’s reduction strategies employed included the laying off of team members, mandatory salary cuts for all staff, decommissioning of all heavy-duty equipment.”
Consequently, loss from operation amounted to $28.12 million in contrast to operating profit of $10.18 million for the same period last year. For the quarter, operating loss was $15.31 million compared to the operating profit of $4.47 million reported for the second quarter of 2019. Management highlighted that, “the company is reporting a loss from operations as a direct result of the bad debt write off and the drastic decline in revenues in the quarter due to the corona virus pandemic.”
Finance and depreciation costs increased to $15.58 million when compared to $10.53 million for the same period of 2019.
Following no taxation (2019: $520,000), a net loss for the period amounted to $43.70 million compared to net loss of $872,000 for the comparable period in 2019. Net loss from operations for the quarter amounted to $24.62 million versus a net loss of $1.07 million for the corresponding quarter of 2019.
Total comprehensive loss amounted to $44.75 million relative to a profit of $632,000 last year. Moreover, for the quarter, total comprehensive loss totalled $24.62 million relative to an income of $299,000 in 2019.
Loss per share (LPS) amounted to $0.44 for the six months relative to 2019’s LPS of $0.01 while LPS for the quarter totalled $0.246 this compares to an LPS of $0.011 in 2019. The twelve-month trailing loss per share (LPS) amounted to $0.60. The number of shares used in our calculations is 100,000,000. KLE’s stock last traded on August 18, 2020 at $1.42.
KLE noted, “We have had some good fortune with the timing of the real estate board approval which has finally now been granted after a lengthy delay with building approvals at the St. Mary Parish Council. They cited a lack of resources and increased workload as the reasons for the lengthy delays. Be that as it may we are now in a position to begin the sales and marketing phase of the development..”
Balance Sheet Highlights:
The company, as at June 30, 2020, recorded total assets of $277.33 million, an increase of 26% when compared to $219.27 million in 2019. This was due to an increase in ‘Property, Plant & Equipment’ which was $101.71 million (2019: $24.16 million).
Total Stockholders’ Equity as at June 30, 2020 was $54.58 million, down from $114.81 million last year. This resulted in a book value of $0.55 (2019: $1.15).
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