November 09, 2020
Transjamaican Highway Limited (TJH), for the nine months ended September 30, 2020, reported a 17% decrease in revenue to US$32.63 million relative to US$39.26 million in the corresponding period last year. Revenue for the third quarter amounted to US$11.22 million (2019: US$13.32 million), a 16% decrease. TJH noted that, “this decrease resulted mainly from the decline in Traffic we have been experiencing as a result of the various measures implemented to help combat the spread of the Coronavirus.”
Other losses amounted to US$68,000 for the nine months ended September 30, 2020 relative to other gains of US$2.73 million for the comparable period in 2019. Whereas, for the quarter ended September 30, 2020 other losses totalled US$126,000 relative to other gains of US$830,000 in 2019. The Company highlighted that, “Other gains and losses are comprised primarily of the gains produced by financial market operations and resulting financial income on investment instruments, amortization of the Shareholder Grant and the change in value of equity investments. Under the Concession Agreement, the Company also has the right to collect revenues generated from commercial exploitation of the areas surrounding the Toll Road, including gas stations and related ancillary services, electricity and telecommunication cables and fiber optics (collectively, the “Secondary Developments”).” Furthermore, the decrease in other gains, “was primarily due to the impact of the amortization of the Discounted Shareholder grant which was offset by foreign exchange losses resulting from the continued devaluation of the Jamaican Dollar against its U.S Dollar counterpart,” as per Management.
For the nine months ended September 30, 2020, operating expenses totalled US$26.99 million versus the US$25.47 million in the comparable period last year, a 6% increase year over year. Whereas, operating expenses for the third quarter rose by 13% to amount to US$9.76 million (2019: US$8.61 million). The Company noted that operating expenses “consist primarily of operation and maintenance costs of the Toll Road, including the Operator’s (Jamaican Infrastructure Operator Limited’s) Monthly Fixed and Variable Fee and amortization of intangible assets.” Furthermore, the increase in operating expense was due to “increases in insurance cost, the Operator’s monthly fixed fee and repairs and maintenance cost. This was offset by a reduction in the Operator’s variable fee (tied to the decrease in traffic).”
Administrative expense increased 5% to US$885,000 (2019: US$844,000) for the nine months ended September 30, 2020. For the third quarter, there was a 30% decrease in administrative expenses to total US$199,000 (2019: US$286,000). TJH mentioned that, “administrative expenses are primarily comprised of staff costs, depreciation of plant and equipment and other routine office expenses.” Notably, this decrease in administrative expenses for the quarter was “due to reduction in travel and other expenses arising from the impact of the Pandemic.” Whereas, the increase in the nine months administrative expenses was due to, “additional expenses arising from the issuance of the Secured Notes and the JSE listing, this was also offset by the factors mentioned above for the quarter,” as per TJH.
Finance cost amounted to US$13.34 million (2019: US$13.55 million) due to “the cost incurred in the debt restructuring which saw our existing loans being repaid and the Secured Notes being issued during the first quarter of this year,” as per Management. Finance cost for the third quarter ended September 30, 2020, equalled US$3.88 million when compared to US$4.63 million for the corresponding quarter last year. According to the Company, this decrease in finance resulted from, “the difference in our loan portfolio (Interest on Secured Notes vs Multilateral Banks + loss on SWAP derivative).”
Loss before taxation closed at US$8.66 million versus profit before taxation of US$2.14 million as at September 2019. TJH reported loss before tax of US$2.74 million versus a profit before tax of US$625,000 for the third quarter of 2019.
The Company reported a taxation credit of US$4.83 million for the nine months ended September 30, 2020 (2019: nil), resulting in a net loss of US$3.83 million, relative to a profit of US$2.13 million booked for the corresponding period last year. Net loss for the quarter amounted to US$2.74 million relative to a profit of the US$625,000 in 2019.
Consequently, loss per share (LPS) amounted to US0.022 cent for the quarter ended September 30, 2020 relative to an earnings per share (EPS) of US0.005 cent last year. For the nine months ended September 30, 2020, LPS amounted to US0.0306 cent relative to an EPS of US0.017 cent booked in the corresponding period last year. The twelve months trailing EPS amounted to US0.019 cent. The number of shares used in this calculation was 12,501,000,000 shares. TJH traded on November 6, 2020 at JMD$1.29 while TJHUSD closed at US$0.01.
Management highlighted that, “Regarding Highway 2000 East-West, the end of the confinement imposed on the parish of St Catherine (between mid-April and May 1, 2020) further slowed the sharp decline in traffic that had been observed in the second quarter of this year (-34.5%) compared to the previous year). The decline during this 3rd quarter, when compared to the previous year was 9.3% in July, 7.2% in August and 13.8% in September (i.e. a total of 10.1% for the 3rd quarter 2020). Between January 2020 and September 2020, the decrease in traffic over one year was 16.4%.”
Moreover, Management stated, “At present, the one-month postponement of the start of the school year and the use of distance learning continues to weigh on the current level of traffic, as does the maintenance of the curfew and the ban on large gatherings.”
Nevertheless, “given the uncertainties of this global health crisis and the unknown measures that could occur to contain the spread, it has become increasingly difficult to forecast the company’s performance in the months to come,” as per TJH.
Balance Sheet at a Glance:
As at September 30, 2020, total assets closed at US$325.07 million relative to US$293.72 million the prior year. Notably, deferred tax assets totalled US$26.27 million (2019: nil) and restricted asset amounted to US$55.80 million (2019: US$36.19 million) as at September 30, 2020.
Shareholders’ equity totalled US$55.08 million (2019: US$59.08) resulting in a book value of US$0.0044 (2019: US$0.0047).
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