RJR reports 24% decline in nine months ended net profit

Date: February 12, 2019

RJRGLEANER Communications Group (RJR) revenues for the nine months ended December 31, 2018, increased by 9% to $4.21 billion compared to $3.87 billion for the comparable period the prior year. For the quarter, revenues increased 8% to close at $1.50 billion (2017: $1.39 billion). The company noted, “ The Group recorded a $143 million increase in third quarter revenues largely due to Broadcasting Revenue relating to major advertising campaigns during the Christmas season.”

Direct Expenses for the period increased by 16% to $2.15 billion relative to $1.84 billion for the same period in 2017. As a result, gross profit for the period increased by 1% to 2.06 billion (2017: $2.03 billion)

The Company reported a 3% increase in total operating expenses to $2.06 billion when compared to $2.01 million posted in the same period in 2017. This was mainly attributed to a 9% increase in the company’s Selling expenses from $556.70 million in 2017 to $605.54 million. The Company noted, this was “due substantially to higher agency commission, associated with higher revenues in the quarter.” Administration expenses for the period however declined by 1% from $919.43 million in 2017 to $906.82 million.

Other income for the period amounted to $88.98 million (2017: $71.84 million) representing a 24% increase year on year.  Thus, Operating profit of $91.82 million was reported for the period relative to an operating profit of $94.84 million reported in 2017, a 3% decline.

Finance costs for the period increased 56% moving to $46.15 million (2017: $29.65 million) for the period.

As a result, profit before tax amounted to $45.68 million relative to $65.19 million reported in 2017. After taxation of $11.45 million (2017: $21.41 million), the company reported a net profit of $34.23 million (2017: $43.78 million) for the period. For the quarter,  net profit amounted to $167.54 million relative to $78.94 million reported in 2017.

Earnings per share for the nine months amounted to of $0.014 relative to an EPS of $0.018 in 2017. For the quarter,  the company reported earnings per share of $0.069 compared to $0.033 reported in 2017. The twelve trailing months loss per share amounted $0.021. The number of shares used in our calculations is 2,422,487,654 units. Notably, RJR’s stock price closed trading on February 11, 2019 at a price of $0.82

Balance Sheet Highlights:

As at December 31, 2018, the Company reported total assets of $3.85 billion, a decline of $167.21 million when compared to $4.02 billion in the prior year. Of this, Retirement benefit assets declined 81% to $59.73 million (2017: $322.77 million) while Intangible assets fell 27% to $403.46 million (2017: $552.04 million). This was however tempered by the 348% increase in Deferred tax to $187.73 million (2017: $41.95 million).

Shareholders’ Equity as at December 31, 2018 was $2.44 billion a 6% decline compared to $2.60 billion for the prior year. This resulted in a book value per share of $1.01 (2017: $1.07).


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