PTL reports 7% increase in nine months net profit

Date: April 14, 2020

Paramount Trading (Jamaica) Limited recorded a slight 3% decrease in total revenues to $1.15 billion from $1.19 billion reported in 2019. For the quarter, revenues declined 3% to close at $381.51 million (2019: $394.03 million).

Direct expenses closed the period at $807.30 million, a decline of 1% relative to the $814.05 million booked a year ago. As a result, gross profit fell by approximately 9%  to $342.42 million (2019: $375.52 million). For the quarter, gross profit closed at $111.30 million relative to $118.44 million reported in the prior corresponding quarter.

Other operating income amounted to $39.62 million for the nine months period compared to $13.30 million booked for the previous year’s corresponding period. PTL stated that, “this additional income was mainly as a result of foreign exchange gains.” For the third quarter, other operating income closed at $16.72 million (2019: $7.09 million).

Administrative expenses declined by 8% to $284.04 million, down from the $309.28 million recorded for 2019. Selling and distribution expenses fell by 6% for the nine months to close at $14.06 million (2019: $14.93 million). The Company mentioned that, “the reduction in operating expenses was driven primarily by cost containment programs and expense rationalization.” As such, operating profit amounted to $83.95 million compared to $64.61 million for the same period for the prior comparable financial year. For the quarter, operating profit went up 73% to close at $21.08 million (2019: $12.21 million).

Interest income amounted to $2.30 million (2019: $801,663), while finance cost increased to total $30.49 million (2019: $13.92 million). For the quarter, interest income and finance cost closed at $335,933 (2019: $580,896) and $10.86 million (2019: $3.76 million), respectively. “Net finance cost for the quarter was mainly due to the interest cost on the 8.75% preference shares during the last quarter of financial year 2018/2019,” as indicated by PTL.

Pre-tax profit for the period totaled $55.75 million, 8% more than the $51.49 million reported in the prior corresponding period. Taxes were charged for the period amounting to $6.97 million relative to $5.97 million in 2018. As such, net profit closed at $48.78 million, an increase of 7% (2019: $45.52 million). Management noted that, “this was mainly attributed to the reduction in operating expenses, resulting from the restructuring exercise carried out in the latter part of the prior year.” For the quarter, net profit amounted to $9.24 million (2019: $8.05 million), a 15% improvement.

Earnings per share for the nine months amounted to $0.032 (2019: $0.030). The trailing twelve months earnings per share equaled $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 $2.25 on April 14, 2020.

PTL highlighted that, “we spent $282 million on capital expenditure as we continue to build out our manufacturing capacity. This expansion was financed, in the main, by proceeds from our preference shares issued in 2019.”


Balance Sheet Highlights:

As at February 28, 2020, the Company’s total assets totaled $1.73 billion, 31% more than the $1.32 billion quoted a year ago. The main contributors to this growth was the increase in ‘Fixed Assets’ and ‘Cash and Cash Equivalents’ which closed at $603.58 million (2019: $266.25 million) and $88.84 million (2019: $5.64 million), respectively. This was tempered by a decline in ‘Receivables’ which closed at $357.93 million (2019: $455.43 million).

Shareholders’ Equity as at February 2020 stood at $790.15 million (2019: $724.25 million), resulting in a book value per share of $0.51 (2019: $0.47).


Disclaimer: Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein