November 15, 2022

Radio Jamaica Limited (RJR)

Unaudited Financials for the six months ended September 30, 2022:

Radio Jamaica Limited (RJR), revenue for the six months ended September 30, 2022, declined by 4% to $2.74 billion from $2.86 billion in the prior comparable period. Revenue for the quarter increased marginally to $1.439 billion (2021: $1.436 billion). RJR noted that revenue was in line with prior year results and this was “driven mainly an increase in the Print and Online $1.1 billion (4%) division and decreases in the Audio/Visual $1.2 billion (2%) and Audio $405 million (1%) divisions.” Management went further to explain that “The group continued to experience softness in the overall advertising market as businesses continue to be impacted by the aforementioned local and global economic challenges.”

Direct expenses increased to $1.22 billion, this compares to the prior year’s figure of $1.12 billion, representing an increase of 8%.

As such, gross profit contracted 12% to $1.52 billion relative to $1.73 billion for the corresponding period in 2021.

Operating expenses increased for the period under review by 4% from $1.59 billion in 2021 to $1.65 billion in 2022. There was a 4% increase in selling expenses to $527.87 million (2021: $508.89 million), and a 2% decrease in administrative expenses to $676.72 million (2021: $687.85 million). Management noted that the increase in selling expenses were “driven by increased distribution-related costs.” In addition to this they attributed the increase in administrative and other operating costs to “ depreciation charges relating to infrastructure upgrades and one-of consultancy costs” and ”increased utility costs, as well as higher repair and maintenance costs.”

Other income increased 97% for the period to $96.28 million compared to the 2021 figure of $48.98 million.

Operating loss closed the period in review at $34.69 million versus operating profit of $194.83 million in 2021.

Finance costs increased 13% year on year to $25.43 million when compared to the corresponding period in 2021 amount of $22.54 million.

Loss before taxation closed the six months at $60.12 million relative to profit before taxation of $172.29 million documented in the previous comparable period.

Tax credit amount to $7.85 million in 2022 relative to a charge of $34.82 million incurred in 2021, which resulted in net loss for the period closing at $52.27 million relative to a profit of $137.47 million for the prior year’s corresponding period in 2021. Net loss attributable to shareholders amounted to $56.02 million versus profit of $136.06 million booked in the same period last year.

The losses per share (LPS) for the six-month period amounted to $0.022 versus an EPS of $0.057 in 2021. The twelve months trailing earnings per share is $0.06. The number of shares used in this calculation was 2,422,487,654 units. RJR stock last traded on November 14, 2022, at $1.93 with a corresponding P/E of 31.25 times.

Balance Sheet Highlights:

The Company, as at September 30, 2022 recorded total assets of $4.87 billion, an increase of 1% when compared to $4.81 billion for the previous corresponding period. This was attributable to a 29% increase in ‘Fixed Assets’ to $2 billion (2021: $1.55 billion), however this was offset by a 21% decrease in ‘Receivables’ to $1.21 million (2021: $1.54 million).

Total Stockholders’ equity as at September 30, 2022 closed at $2.68 billion, a increase of 1% from $2.66 billion last year. This resulted in a book value of $1.11 compared to a 2021 value of $1.1.

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