PTL reports 5% increase in six months net profit

January 14, 2020

Paramount Trading (Jamaica) Limited for the six months ended November 30, 2019 recorded a slight 3% decrease in total revenues to $768.22 million from $795.54 million reported in 2018. For the quarter, revenues rose 8% to close at $407.64 million (2018: $378.46 million).

Direct expenses closed the period at $537.09 million relatively unchanged compared to $538.46 million booked in the corresponding period in 2018. As a result, gross profit fell by 10% to $231.13 million (2018: $257.08 million). For the quarter, gross profit closed at $124.67 million relative to $122.89 million reported in the prior corresponding quarter.

Other operating income amounted $22.90 million for the six months period, an increase of 269% compared to $6.21 million booked for the previous year’s corresponding period. PTL added that, “this additional income was mainly as a result of foreign exchange gains.” For the second quarter, other operating income fell by 46% to close at $12.90 million (2018: $23.68 million).

Administrative expenses declined 9% to $183.31 million, down from the $201.75 million recorded for 2018 as a result of the “Company’s cost containment programme,” Management noted. Selling and distribution expenses fell by 14% for the six months to close at $7.85 million (2018: $9.14 million). As such, operating profit amounted to $62.86 million compared to $52.40 million for the same period of the prior financial year. For the quarter, operating profit went down 2% to close the quarter at $37.56 million (2018: $38.33 million).

Finance income amounted to $1.96 million up 789% when compared to the $220,767 reported for the prior comparable period, while finance costs grew by 93% to total $19.63 million (2018: $10.17 million). The Company highlighted that finance cost increased, “mainly due to the interest cost of the 8.75% preference shares during the last quarter of financial year 2018 to 2019.”

Pre-tax profit for the period totalled $45.20 million, 6% more than the $42.46 million reported in prior corresponding period. Taxes were charged for the period totalled $5.65 million relative to $4.95 million in 2018. As such, Net profit attributable to shareholders totalled $39.55 million, an increase of 5% (2018: $37.51 million). However, for the second quarter, net profit totalled $24.93 million in 2019 relative to $29.76 million in comparable quarter of 2018. The Company noted that the increase in net profit was attributable to, “the reduction on operating expenses, resulting from restructuring exercise carried out in the latter part of the year.”

Earnings per share for the six months totalled $0.03 (2018: $0.02). The trailing twelve months earnings per a share is $0.04. 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 $1.72 on January 14, 2020.

Furthermore, Management noted, “We continue to build out our manufacturing operations with over $268 million in capital expenditure for the six months ended November 30, 2019. This expansion was financed in the main by the proceeds from our preference share issued earlier in the year.”

Balance Sheet Highlights:

As at November 30, 2019, the company’s assets totalled $1.66 billion, $394.35 million more than the $1.27 billion quoted a year ago. The main contributor to this growth was the increase in ‘Property, Plant and Equipment’ which closed at $604.90 million relative to $271.24 million a year ago as well as ‘Investments’ which as at November 30, 2019 amounted to $96.53 million, a 1207% growth relative to the $7.39 million recorded in 2018. In addition, ‘Cash and Cash Equivalents’ contributed to this increase closing at $78.35 million (2018: $34.01 million).

Shareholder’s equity as at November 30, 2019 stood at $780.91 million (2018: $716.24 million) resulting in a book value per share of $0.51 (2018: $0.46).

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