PTL reports 50% decline in six months net profit

January 15, 2020

Paramount Trading (Jamaica) Limited for the six months ended November 30, 2020 recorded a 13% decrease in total revenues to $668.61 million from $768.22 million reported in 2019. For the quarter, revenues fell 25% to close at $306.60 million (2019: $407.64 million). PTL added that, “the impact of the pandemic and the consequent economic decline have resulted in our revenue contraction.”

Direct expenses closed the period at $452.25 million 16% down compared to $537.09 million booked in the corresponding period in 2019. As a result, gross profit fell by 6% to $216.36 million (2019: $231.13 million). For the quarter, gross profit closed at $100.02 million relative to $124.67 million reported in the prior corresponding quarter.

Other operating income amounted $12.75 million for the six months period, a decrease of 44% compared to $22.90 million booked for the previous year’s corresponding period. For the second quarter, other operating income fell by 40% to close at $7.69 million (2019: $12.90 million). It was noted that reduction in operating income was “mainly associated with foreign exchange gains and losses.” as per PTL.

Administrative expenses declined 4% to $176.83 million, down from the $183.31 million recorded for 2019. Selling and distribution expenses fell by 34% for the six months to close at $5.20 million (2019: $7.85 million). As such, operating profit amounted to $47.07 million compared to $62.86 million for the same period of the prior financial year. For the quarter, operating profit went down 55% to close the quarter at $16.75 million (2019: $37.56 million).

Finance income amounted to $1.19 million down 40% when compared to the $1.96 million reported for the prior comparable period, while finance costs grew by 31% to total $25.75 million (2019: $19.63 million). PTL explained that this increase was mainly due to “the interest cost as a result of the increase in our long term liabilites.”

Pre-tax profit for the period totalled $22.51 million, 50% less than the $45.20 million reported in prior corresponding period. Taxes were charged for the period totalled $2.81 million relative to $5.65 million in 2019.

As such, net profit for the period being total comprehensive income totalled $19.70 million, a decrease of 50% (2019: $39.55 million) when compared to 2019 six-month period. However, for the second quarter, net profit totalled $4.52 million in 2020 relative to $24.93 million in comparable quarter of 2019.

Earnings per share for the six months totalled $0.01 (2019: $0.03). As for the second quarter, EPS amounted to $0.003 (2019: $0.016). The trailing twelve months earnings per share is $0.022. 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 $1.25 on January 14, 2021 with a corresponding P/E of 58.13 times.

The Company stated, “Over the last six months, Paramount, like most companies, has experienced unprecedented challenges to our business as a result of the novel COVID-19 pandemic. We have adapted to the circumstances and will continue to be proactive in the measures taken to combat its impact on our operations. We have continued to purse our growth strategy whilst maintaining the operational framework, which was developed to prioritize the safety of our staff members, customers and other stakeholders.”

Furthermore, “We will continue pivoting our operations to maximize on any possible gains we may derive during this period of crisis. We expect that our strategic objectives will be realized through strong income and cost containment.”

Balance Sheet Highlights:

As of November 30, 2020, the company’s assets totalled $1.70 billion, $41.04 million more than the $1.66 billion quoted a year ago. The main contributor to this growth due to ‘Right of Use Asset’ which closed at $78.65 million (2019: nil) as well as ‘Investments’ which as of November 30, 2020 amounted to $166.30 million, a 72% growth relative to the $96.53 million recorded in 2019. In addition, ‘Cash and Cash Equivalents’ contributed to this increase closing at $115.10 million (2019: $78.35 million). However, the growth was offset by a decline in ‘Receivables’ by $98.17 million, amounting to $250.30 million (2019: $348.47 million).

Shareholder’s equity as of November 30, 2020 stood at $814.08 million (2019: $780.91 million) resulting in a book value per share of $0.53 (2019: $0.51).



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