Profit at Caribbean Cement surged over by $1.15 billion to $1.23 billion percent in the September quarter, from a 32 percent jump in sales. For the nine months to September, profit jumped a strong 42 percent to $2.2 billion from $1.57 million in 2019 as revenues rose 12 percent to $15 billion.
Investors immediately reacted to the results by driving the stock up $8.04 or 17.5 percent to $54 on the Jamaica Stock Exchange.
The third quarter results blew past the June quarter, with revenues of $4.78 billion reflecting a modest increase over 2019 with the profit rising from $368 million to $521 million.
Operating profit surged 69 percent in the quarter, to $2.85 billion from $1.69 billion and rose 19.6 percent for the year to date, to $6.97 billion from $5.8 billion in 2019. Direct operating cost, increased 8.5 percent from $2.7 billion to $2.93 billion and increased 5.8 percent for the year to date, to $8.1 billion from $7.7 billion in 2019.
Other operating and administrative expenses dropped 25 percent to $6.44 million in the quarter and fell slightly in the nine months period to $2.04 billion. Foreign exchange losses amounted to $266 million in the quarter and $923 million for the year to date, while finance cost declined in the quarter, to $173 million from $209 million in 2019 and from $677 million to $503 million for the nine months. The company provided $536 million for taxation for the quarter representing 30 percent of the profit and $1.27 billion for the nine months for 36 percent of profit.
Earnings per share came out at $1.44 for the quarter and $2.62 for the nine months. ICInsider.com is forecasting $3.50 per share for a PE of 15 times earnings. The amount could be beaten as there could be no foreign exchange losses in the December quarter and if sales keep close to the third quarter numbers while the provision for taxation could less than in the third quarter.
Gross cash flow provided by operating activities brought in $2.56 billion from which they paid $2.5 billion against loans, leaving $374 million in cash at the end of the period.
At the end of September, shareholders’ equity stood at $10.58 billion, up from $8.3 billion at the end of December last year. Borrowings are down to $7.7 billion from $12.8 billion at the close of September last year.
The results for the quarter shows the potential for the company to increase profits as cost are fairly fixed. The reverse is true as lower sales will adversely affect gross profit and drag profits lower. With the expansion in buildings in Jamaica and prospects for exports barring increased importation of cement into Jamaica, the future appears bright for the company. Added to the above is the rapid repayment of loans that will reduce interest cost and foreign exchange losses.
Archives for October 2020
Cement Q3 profit jumps $1.15B
NCB out of IC TOP 10
The Main and Junior Markets closed the past week lower than the close of the previous week, with the Main market at a higher level than the third week of July, while the Junior Market continues at the lowest levels since the early summer months.
The Junior Market is currently signaling a big surge coming that will start in a few weeks as short term moving averages cross over longer-term ones to confirm a strong rally.
The price of Salada Foods sank to $20 on Friday, pushing NCB Financial out of the IC TOP 10 Main Market. As the markets continue to trade in a narrow band, there was no other movement in and out of the TOP 10.
The top three stocks in each market saw no change in ranking, leaving the top three Junior Market stocks with the potential to gain between 282 to 764 percent by March 2021. Caribbean Producers heads the list, followed by Lasco Financial and Elite Diagnostic. The focus on all three is on the 2021 fiscal year profit, projected to recover from reduced profit for the 2020 financial year. With expected gains of 151 to 227 percent, the top three Main Market stocks are Berger Paints, followed by JMMB Group and Grace Kennedy.
The local stock market’s targeted average PE ratio is 20 based on companies reporting full year’s results from now to the second quarter in 2021. The Junior and Main markets are currently trading well below this level, indicating the potential gains ahead. The JSE Main Market ended the week, with an overall PE of 16.1 and the Junior Market 12.2, based on ICInsider.com’s projected 2020-21 earnings. The average PE ratio of the Junior Market has been slowly rising, with better profit opportunities than the Main Market and narrowing the gap. The PE ratio for the Junior Market Top 10 stocks average a mere 5.7 at just 47 percent to the Junior Market average. The Main Market TOP 10 stocks trade at a PE of 8.4 or 52 percent of the PE of that market.
The average projected gain for the Junior Market IC TOP 10 stocks is 299 percent and 144 percent for the JSE Main Market, based on 2020-21 earnings, indicating potentially greater gains in the Junior Market than the Main Market.
IC TOP 10 stocks are likely to deliver the best returns up to March 2021 and ranked in order of potential gains, based on likely gain for each company, taking into account the earnings and PE ratios for the current fiscal year. Expected values will change as stock prices fluctuate and result in movements in and out of the lists for most weeks. Revisions to earnings per share are ongoing, based on receipt of new information.
Persons who compiled this report may have an interest in securities commented on in this report.
Paramount Q1 profit inches higher
Paramount Trading continues to struggle to return to its glory days in netting profit of $15 million for the August quarter, just four percent more than the $14.7 million generated corresponding period in 2019, from revenues that inched up to $362 million from $360.5 million in 2019.
The company is involved in the importation and distribution of chemicals, lubricants and other related products and processes chlorine, bleaches and lubricants.
Direct expenses fell 3 percent from $254 million in 2019 to $246 million resulting in gross profit growing nine percent to $116 million from $106 million in 2019.
Other income dropped from $10 million to $5 million, a reduction the Chairman attributed to exchange rate movement. Administrative, selling and distribution expenses grew marginally, from $88.9 million in 2019 to $89.3 million in 2020. The effect, profit before finance cost climbed 20 percent from $25.3 million in 2019 to $30.3 million. Net finance costs also jumped 51 percent for the period, moving from $8.6 million in 2019 to $12.9 million as the company increased borrowings.
Profit peaked in 2017 and declining since, as costs incurred in anticipation of expanded revenues from new business outpaced revenue increases. While the business has expanded into the manufacturing of lubricants, chlorine processing into smaller packages and bleach, revenues have not kept pace with cost increase, resulting in depressed profit and ultimately pushing borrowings upward to help with funding expansion.
The situation is compounded by the closure of the Alpart Alumina plant and sugar factories, entities that consume produce sold by the company.
Gross cash flow from operating activities brought in $29 million. Inventories fell by $149 million compared to May year-end to $535 million, but amounts provided by creditors fell $147 million, while credit provided to customers rose by $22 million. Current assets ended the period at $901 million, including receivables of $292 million and cash and bank balances of $71 million as well as inventories. Current liabilities rounded out at $413 million. The company also held investments of $138 million at the end of the quarter. At the end of August, shareholders’ equity stood at $810 million, with borrowings at $524 million.
The company reported earnings per share came of a mere one cent for the quarter compared to 0.9 of a cent for the corresponding quarter in 2019. For the fiscal year to May 2020 and EPS was just 3.4 cents. ICInsider.com forecasts 8 cents per share for the full year resulting in a PE Ratio of 21 times 2021 earnings based on the price of $1.70 the stock last traded at on the Junior Market of the Jamaica Stock Exchange.
In its annual report for the just concluded financial year, the company reported that “during the new financial year, the Company will continue to build out its productive capacity. We have capitalized our lubricant plant and installed the packaging line. Renovation activities already started on the bleach and chlorine plants will continue in the new financial year. We have also expanded into manufacturing sanitation products and will widen the product base over time. Our main drivers in the short term will be the revenue we will derive from our new products, the expansion of our offerings in the Bleach division, and our continued pursuit of contract manufacturing in our Lubricant division”.
JPS slackness
Many Jamaicans have been paying their JPS bills through the MYJPS web portal for years, but the company does not have the decency to advise persons making payments by that method that they are making changes to the system.
In August, the site was not operational for days, but JPS still charged persons using that system, late fee, although it was not the customers’ fault. In September, the site was operational, but now the site is gone. A call to JPS confirms that they have migrated to a new system; as such, the old information will have to be inputted allover. This is awful customer service.
This is not the approach that the company should take. Clearly, the customers are not important, if they were, they would have been informed and efforts would have been taken to migrate to information over to the new system.
Big drop in JSE USD market
The US dollar market of the Jamaica Stock Exchange closed trading on Friday, with the market declining after a massive increase of 8,204 percent more shares traded than on Thursday as Proven Investments dominated with 1.4 million shares.
Five securities changed hands similar to Thursday, with the price of one rising, two declining and two remaining unchanged at the close of the market.
The JSE USD Equities Index plunged 14.16 points to 177.06, with the average PE Ratio ending at 13.1 based on the ICInsider.com forecast of 2020-21 earnings.
The market closed with an exchange of 1,635,494 shares, accounting for US$294,978 compared to just 19,696 units at US$9,715 on Thursday.
The average trade for the day amounted to 327,099 units changing hands at US$58,996, in contrast to an average of 3,939 shares at US$1,943 on Thursday. Trading ended with an average of 928,771 units for the month to date at US$20,204, in contrast to 982,492 units at US$16,740. By comparison, September ended with an average of 84,017 units for US$10,590.
At the close of trading, the Investor’s Choice bid-offer indicator reading shows two stocks ending with bids higher than its last selling price and none with lower offers.
At the close of the market, First Rock Capital Investment settled at 9 US cents, with an exchange of 1,316 shares Margaritaville closed at 15 US cents, after trading 1,290 units, Proven Investments lost half a cent to end at 26 US cents, clearing the market with 1,420,731 shares. Sygnus Credit Investments closed at 13.08 US cents, with a loss of four-tenths of a cent ending as investors swapped 5,792 stock units and Transjamaican Highway lost one-tenth of a cent end at 0.93 of a US cent, in exchanging 206,365 shares.
Prices of securities trading are those for the last transaction of each stock unless otherwise stated.
Trading plunged on TTSE
Trading plunged on Friday, with an exchange of 91 percent fewer shares than on Thursday as the value of stocks changing hands dived 97 percent on the Trinidad and Tobago Stock Exchange as just 7 securities traded, down from 14 on Thursday.
Trading resulted in 49,373 shares for $239,933 compared to 552,641 shares valued $9,388,509 on Thursday. Two stocks advanced, four declined and only one remained unchanged.
The average trade for the day amounted to 7,053 units at $34,276 versus an average of 39,474 units at $670,608 for each security on Thursday. For the month to date, the average trade amounts to 15,556 shares at $300,202 compared to 15,847 units at $309,327 on Thursday, exceeding the outturn for September with an average of 12,021 shares for $174,137.
The T&T Composite Index shed 1.40 points to 1,308.34, the All T&T Index fell by 2.78 points to end at 1,760.19, while the Cross Listed Index remained unchanged at 115.76.
The Investor’s Choice bid-offer indicator shows the bids of three stocks higher than their last selling price and ten with lower offers.
Stocks rising│First Citizens rose by 50 cents to $45, trading 419 units and National Flour picked up 15 cents to close at $2, with an exchange of 29,580 shares.
Stocks declining│One Caribbean Media shed 30 cents to finish at 52 weeks’ low of $4.50 after trading 2,000 shares, Prestige Holdings lost 1 cent exchanging 66 units to settle at $7.49. Unilever Caribbean ended at $16.80, with a loss of 15 cents trading 422 units and West Indian Tobacco lost 1 cent to close at $33.44, with 3,644 stock units changing hands.
Stocks trading firm│ JMMB Group ended the day at $1.80, trading 13,242 shares.
Prices of securities trading are those for the last transaction of each stock unless otherwise stated