October 16, 2019
Paramount Trading (Jamaica) Limited, for the three months ended August 31, 2019, recorded a 14% decrease in total revenues to $360.57 million from $417.08 million reported in 2018. The company highlighted that, “the reduction in revenue was mainly due to less than expected outturn in the construction and technical grade brands. We expect that the lost sales for the first period will be recovered during the second quarter.”
Direct expenses closed the period at $254.12 million, a 10% decrease relative to the $282.89 million booked a year ago. Gross profit therefore declined by approximately 21% to $106.45 million (2018: $134.19 million). The Company noted, “ we did not close on the several high value sales during the period. These will be billed during the second quarter.”
Other operating income amounted $3.07 million for the quarter, a growth of $1.66 million compared to $1.41 million booked for the previous year’s corresponding period.
Administrative expenses declined 11% to $88.85 million, down from the $99.58 million recorded for 2018. Selling and distribution expenses also decreased by 25% for the quarter to close at $2.29 million (2018: $3.06 million). As such, operating profit amounted to $18.38 million compared to $32.95 million for the same quarter of the prior financial year. In addition, management stated, “Our restructuring exercise that was implemented during the third and fourth quarter last year are now producing the desired outcome on the expense side of the organization.”
Finance income amounted to $1.48 million up 287% when compared to the $381,663 reported for the prior year, while finance costs declined by 87% to total $3.15 million (2018: $24.54 million). “ Finance cost shows a 93% reduction due to a positive outcome in our foreign exchange risk management.”
Pre-tax profit for the quarter totalled $16.71 million, 90% more than the $8.79 million reported in prior corresponding quarter. Taxes were charged for the quarter in the amount of $2.09 million relative to $1.04 million in 2018. As such, Net profit attributable to shareholders totalled $14.62 million, a rise of 89% (2018: $7.75 million). Management noted, “ the increase was driven by reduction in overheads resulting from the restructuring exercise carried out in the latter part of the prior year.”
Earnings per share for the three months totalled $0.009(2018: $0.005). The trailing twelve months loss per a share is $0.045. 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 $2.21 on October 16, 2019.
PTL mentioned that, “the outlook for Paramount is very positive. The company will have the full capacity of out lubricant manufacturing plant and positive outflow from this development will soon be evident. We will ensure that we benefit from the general improvements in the economy. The manufacturing, construction and transportation sectors will influence our growth.”
Balance Sheet Highlights:
As at August 31, 2019, the company’s assets totalled $1.43 billion, $183.30 million more than the $1.25 billion quoted a year ago. The main contributor to this growth was the increase in ‘Investments’ which closed at $198.40 million relative to $7.39 million a year ago but was however offset by a 24% decrease in receivables to $351.26 million (2018: $463.17 million)
Shareholder’s equity as at August 31, 2019 stood at $755.99 million (2018: $ 748.18 million) resulting in a book value per share of $0.49 (2018: $0.49).
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.