PTL reports 32% decline in nine months net profit

Date: April 12, 2019

Paramount Trading (Jamaica) Limited, for the nine months ended February 2019, recorded a slight 1% decrease in total revenues to $1.03 billion from $1.04 billion reported in 2018. For the quarter, revenues declined 5% to close at $329.79 million (2018: $348.08 million).

PTL mentioned that, “sales for the quarter did not include Lubricant sales made under the new JV arrangement of $64.3m and $162.6m year-to-date.”

In addition, the Company stated that, “since the beginning of this financial year, the Company commenced accounting for the lubricant business through the new joint venture blending operations with Allegheny and consequently its share of the profit from the venture, is reported in the Financial Statements which amounted to $1.9m in the current quarter and $4m Y-T-D.”

Direct expenses closed the period at $690.27 million, a decrease of 6% relative to the $734.82 million booked a year ago. As a result of the decline in direct expenses, gross profit grew by approximately 12%  to $336.79 million (2018: $300.44 million). For the quarter, gross profit closed at $104.17 million relative to $99.98 million reported in the prior corresponding quarter.

Other operating income amounted to $3.05 million for the nine months period, a decline of 28% compared to $4.20 million booked for the previous year’s corresponding period. For the third quarter, other operating income fell 61% to close at $636,500 (2018: $1.64 million). Share of profit from joint venture closed at $4 million (2018: $nil) and for the quarter amounted to $1.91 million (2018: nil).

Administrative expenses climbed 25% to $270.15 million, up from the $215.53 million recorded for 2018. Selling and distribution expenses surged by 19% for the nine months to close at $23.28 million (2018: $19.58 million). As such, operating profit amounted to $50.42 million compared to $69.53 million for the same period for the prior comparable financial year. For the quarter, operating profit went down 58% to close at $4.61 million (2018: $10.94 million).

Finance income amounted to $801,663 (2018: $6.27 million), while finance cost fell by 61% to total $3.67 million (2018: $9.32 million). For the quarter, finance income and finance cost closed at $7.04 million (2018: $1.35 million) and $3.76 million (2018: $ 3.42 million), respectively.

Pre-tax profit for the period totaled $47.55 million, 28% less than the $66.48 million reported in the prior corresponding period. Taxes were charged for the period amounting to $2.03 million relative to nil in 2018. As such, net profit closed at $45.52 million, a decline of 32% (2018: $66.48 million).

Earnings per share for the nine months amounted to $0.03 (2018: $0.04). The trailing twelve months earnings per share equaled $0.02. The number of shares used in our calculations is 1,542,467,080 units. PTL stock price closed the trading period at a price of $2.15 on April 12, 2019.

Balance Sheet Highlights:

As at February 28, 2019, the Company’s total assets totaled $1.32 billion, 14% more than the $1.16 billion quoted a year ago. The main contributors to this growth was the increase in ‘Receivables’ and ‘Inventories’ which closed at $455.43 million (2018: $339.46 million) and $582.93 million (2018: $444.85 million), respectively.

Shareholders’ Equity as at February 2019 stood at $724.25 million (2018: $748.26 million), resulting in a book value per share of $0.47 (2018: $0.49).

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