Unilever Caribbean dropped $1.75 on Thursday
Shareholders in Trinidad and Tobago based Unilever Caribbean who were brave to start buying the company’s stock at the bottom last year, up to recently, must regretting it now.
The company in its latest quarterly report, shows continued decline in operations with a 15 fall in revenues to $101 million and a fall in profit before tax of 76 percent to $1.35 from $5.7 million in 2017. The company enjoyed a tax credit in the quarter raising reported profit to $3 million versus $3.8 million in 2017. Earnings per share came out at 12 cents for the quarter compared to 15 cents for the 2017 quarter and 40 cents for the 2017 fiscal year. Without the effect of the tax credit earnings would be in the order of 4 cents and paint a vastly more pessimistic picture of the likely full year out turn.
The results are in line with what technical indicators suggested last year that the stock was set to fall below $20. In trading on Thursday the stock price fell by $1.75 in light of the results to $32.25 and has a PE based on 2017 earnings of 80 times with the PE for 2018 looking as if it will exceed 200.
In light of these results the dividend that was maintained in 2017 seems set to be slashed sharply for 2018, as the there is every likelihood that the 2018 results will be worse than in 2017.
The company improved its financial position at the end of the quarter with a sharp cut in trade and other receivables to $84 million from $130 in March 2017, most likely the sharp cut negatively impacted sales of its products. Inventory fell to $55 million from $61 and cash grew to $54 million from $33 million in 2017.
All figures are in Trinidad dollars.
