RJR reports 292% increase in nine months net profit attributable to shareholders

February 13, 2020

For the nine months ended December 31, 2019, Radio Jamaica Limited’s (RJR) revenues increased by 3% from $4.21 billion in 2018 to $4.34 billion. For the quarter, revenues closed at $1.59 billion (2018: $1.50 billion), representing a 6% growth. RJR indicated that, “this was largely due to the performance of the Audio-Visual segment of the business.”

Direct expenses declined 6% to $2.02 billion; this compares to the prior year’s figure of $2.15 billion.  For the quarter, direct expenses went up by 4% amounting to $677.37 million (2018: $651.23 million). The company stated that, “this was mainly due to increased sales and the impact of the devaluation of the Jamaican Dollar.”

As such, gross profit for the nine months amounted to $2.32 billion relative to $2.06 billion for the corresponding period in 2018. While for the quarter, gross profit closed at $910.74 million (2018: $850.33 million).

Total expenses increased for the period under review by 7% from $2.06 billion in 2018 to $2.19 billion in 2019.

    • There was a 5% increase in selling expenses to $636.37 million (2018: $605.54 million). Whereas, administrative expenses closed at $926.82 million (2018: $906.82 million). For the quarter, selling expenses increased to $230.11 million (2018: $204.08 million). RJR mentioned that, “this was due to higher agency commissions, associated with the higher revenues in the quarter.” Notably, administrative expenses, for the quarter, rose to $317.22 million (2018: $294.57 million). Management mentioned, “this was mainly due to general inflation effects and union-negotiated salary increases.”
    • Other operating expenses rose by 16% to $629.96 million relative to $544.04 million in 2018. For the quarter, other operating expenses went up by 27% closing at $238.20 million (2018: $187.19 million). RJR noted that this was as a result of, “higher utility costs.”

Other income fell to $84.27 million in 2019 compared to the 2018’s figure of $88.98 million. While for the quarter, other income closed at $37.82 million (2018: $21.78 million). RJR stated, “this was mainly driven by a increased other income in the Print Segment.”

Operating profit amounted to $215.96 million for the period in review, versus operating profit of $91.82 million reported in 2018. As for the quarter, an operating profit of $163.02 million was recorded relative to an operating profit of $186.27 million booked in the prior comparable quarter.

Finance costs decreased 4% year over year to $44.21 million versus $46.15 million in the prior year.

After incurring taxes of $37.36 million for the nine months ended December 31, 2019 (2018: $11.45 million), RJR recorded a net profit of $134.39 million relative to a net profit of $34.23 million for the prior year’s corresponding period in 2018, a 293% increase. For the quarter, net profit totaled $121.18 million compared to a net profit of $167.54 million in the same period last year.

Net profit attributable to shareholders amounted to $132.13 million for the period under review versus net profit attributable to shareholders of $33.72 million booked in the same period last year.

The earnings per share (EPS) for the nine-month period amounted to $0.055 versus $0.014 in 2018. For the quarter, EPS of $0.05 was recorded versus an EPS of $0.07. The twelve months trailing earnings per share is $0.03. The number of shares used in this calculation was 2,422,487,654 units. RJR stock last traded on April 2, 2020 at $1.86.

The Company highlighted that, “During the quarter, strong revenue initiatives along with higher Christmas season advertising bolstered our financial performance. Implementation of initiatives on our road map towards full digital transitioning were ongoing during the period under review, even as we continued to maintain our strong differentiation through quality local programming and content. The expansion of TVJ International continued during the quarter with revenues from the Cayman market and the testing of the channel in Belize and other Caribbean territories.”

Notably, RJR stated, “the quarter financial results were positively impacted by the agreement between FLOW and TVJ under which the telecommunications provider pays re-transmission fees for the use of TVJ channel on its various subscription platforms.”

Furthermore, RJR noted, “locally we improved television transmission in Portland and St. Mary and continued to invest significantly in technology research and development as we explore the best options for further business growth and expansion.”

Balance Sheet Highlights:

RJR as at December 31, 2019, recorded total assets of $3.90 billion when compared to $3.72 billion for the previous corresponding period. The increase was attributable to an increase in ‘Receivables’ which closed at $1.34 billion (2018: $914.31 million), however, this was tempered by a decrease in ‘Cash and Bank Balances’ to $169.38 million (2018: $446.43 million), respectively.

Total Shareholders’ Equity closed at $2.44 billion, up from $2.35 billion last year. This resulted in a book value of $1.006 (2018: $0.971).

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