Paramount new designed offices.
Junior Market listed Paramount Trading, enjoyed a big turn-around in profit for the first quarter to August this year, with an increase of 126 percent, to $34 million from a 31 percent increase in revenues to $331 million.
Importantly, Paramount incurred exceptional expenses in the first quarter, last year, as the company celebrated its 25 anniversary, IC Insider.com estimates the cost to be around $20 million, excluding this one off cost, profit would have been flat, in both periods.
Administrative and other expenses jumped from $44 million to $62.7 million, but selling and marketing cost dropped from $24 million to $2.8 million. Direct cost rose 35 percent, reducing gross profit margin with gross profit rising slower than the increase in revenues, at 23 percent to reach $101 million.
Earnings per share amounts to 2.2 cents. IC Insider.com places full year’s earnings at 19 cents and for the 2019 fiscal year to May 30 cents with the coming on stream of the joint venture lubricant plant.
The directors’ report stated that they have “an optimistic outlook for the rest of the year and is very excited by the opportunities that will be realized. The construction of the blending plant and laboratory, in conjunction with Alllegheny Petroleum is slated to be complete during the next quarter.”
The balance sheet shows net current assets of US$463 million, including inventories of $338 million, receivables of $283 million and cash funds and investments at $97 million. Borrowings are at $55 million up from only $16 million in August 2016.
The stock currently trades at a PE ratio of 15 with the price at $2.90 on the Junior Market against the market average of 14 and seems to be line with the market. What is true, is the nimbleness of management to identify new income generated opportunities that makes staying close to the stock potentially profitable.
