Jamaica Public Service Company profit got a shock for the June quarter when a 21 percent increase in finance cost drove total cost for the quarter in this area to US$18 million from US$15 million in 2013.
For the six months to June, finance cost was flat with the prior year at nearly US$33 million for each period. The company, the sole distributor of power to end users in the country, reported only US$1.7 million in after tax profit for the quarter and US$8.9 for the six months to June. In 2013 the second quarter profit was US$1.6 million and the six months US$2.4 million.
Revenues generated in the periods to produce those results are US$270 million versus $268 million in 2013 for the quarter and US$533 million in the six months and for 2013, US$539 million. Although the revenues varied, a more important measure is gross profit which are net of the impact of fuel and the charge for the purchase of power from private power plants. The sales net of fuel and the purchases of power came out at US$67.2 million in the June quarter compared with US$62.9 million in 2013 and US$137 million for the six months and US$133.5 in 2013. The return on equity is only around 5.4 percent for the year well below the allowed rate of 16 percent by the regulators, but the impact of devaluation charge due to the accounting in US dollar rather than Jamaican dollars negatively affected the returns.
Ironically, while JPS records its financials in United Sates dollars, the company suffered a devaluation loss of US$7.4 million in the quarter and US$12.5 million for the six months. Without the foreign exchange losses return on equity would have been much greater than the above stated figure.
“JPS currently has approximately 606,654 customers who are served by a workforce of approximately 1,690 employees. The Company owns and operates: 4 power stations, 9 hydroelectric plants, 43 substations and approximately 14,000 kilometres of distribution and transmission lines,” the company stated in its annual report for 2013.
JPS That has equity of US$337 million also has debt of US$418 million as of March.
Finance cost shocks JPS
Little change in employed in March
Jamaica’s unemployment rate drops to 13.6 percent in March compared to March last year, according to data released by the Statistical institute of Jamaica (STATIN), but the rate is worse than it was in December last year. 
The unemployment rate in December was 13.4 percent according to Statin data for that period. There were 1,133,000 employed persons in March this year, which was 25,700 more than the 1,107,300 recorded in April 2013, the Statin labour report said, the March 2014 numbers are only a marginally better than the 1,130,500 persons employed in December last yea.
According to the Statin data, the country’s labour force in March was 1.311 billion persons down from 1.322 billion in Match 2013 as 11,300 persons exited the work force over the one year period, the report stated. At the same time 25,700 persons found work across a wide cross section of the work force. The number of persons classified as outside the Labour Force was 769,900 In March 2014 and an increase of 16,200 over 2013.
Who got jobs?|The Occupation group ‘Elementary Occupations’ increased by 18,200 persons or 12.8 percent, moving from 141,700 in April 2013 to 159,900 in March and the group, ‘Professionals, Senior Officials and Technicians’, increased from 241,900 persons in March 2013 to 251,700 persons (4.1 percent). The group ‘Craft and Related Trades Workers’ had the largest decline for the period, moving from 139,300 in March 2013 to 134,700 in 2014, resulting in a decline of 4,600 (3.3 percent) persons.
The number of persons employed in the ‘Hotels & Restaurants Services’ increased by 9,100 (13.4 percent) persons while the group ‘Transport, Storage and Communication’ increased by 7,300 (10.5 percent) persons.
Jamaica’s trade deficit falls, March’s better
Jamaica enjoyed a reduction in its trade for the first four months of this year, compared with the same period in 2013. The trade deficit amounted to US$1.34 billion, down from US$1.46 billion in 2013.
The country imported goods valued at US$1.86 billion for the January to April 2014 period, a decrease of US$199 million or 9.7 percent and exported US$77 million or 12.9 percent less for the January to April 2014 period, representing a big improvement over the change to March. Total exports for the 4 months came in at S$521 million, down from US$598 million in the similar period in 2013.
For the three months to March this year, imports fell by US$281 million and exports were down US$111 million to US$358 million, down from US$469 million in the 2013.
Carreras pays out $9.09 in last 12 months
Carreras declared an interim dividend of $1.20 per stock unit, to be paid out of accumulated profits on September 4, to stockholders on the Register of Members as at August 18, 2014.The Ex-dividend date is August 14, 2014.
Carreras last declared a special capital cash distribution of $1.34 per stock unit to be paid on July 31. The latest approved dividend will bring the total payments the company made to shareholders since August last year, to $9.09 per share. Carreras traded today at $34.20.
Access Financial Services declared an interim dividend of 36.5 cents payable on September 1, to stockholders on record at August 18, 2014. The Ex-dividend date is August 14. Access last paid 31 cents per share on August 15, last year as dividend. Access last traded at $8.97.
J$ gains versus all 3 majors
The Jamaican dollar made moderate gains against all three main currencies it trades against in Wednesday trading with US$26.6 million being sold at an average an J$112.79 to US$1 as the rate declined by 2 cents, the Canadian lost 4 cents Jamaica to end at J$104.45 and the Pound sterling closed 22 cents lower at J$190.92.
Pan-Jamaican Investment Trust refinances
The first tranche payment of J$600 million due on a $2.5 billion secured notes obtained by Pan-Jamaican Investment Trust in 2012, became payable on maturity on July 22, 2014.
Pan Jamaican indicates in a release to the Jamaica Stock Exchange, that arrangements have been made to refinance the amount with effect from July 23, 2014 for a further two years.
The proceed from the notes was obtained when the company acquired additional shares in Sagicor Life Jamaica (now Sagicor Group) in 2012 for a consideration of $3,055,100,542. The original funds were obtained from a private placement with maturities ranging from 2 years to 5 years.
Jamaica Money Market Brokers raise US$20M
Jamaica Money Market Brokers raised US$20,000,000 through the issue and private placement of unsecured extendible notes denominated in United States dollars. The offer was only available to Jamaican residents.
The private placement offer closed on July 18, 2014 and will mature on July 18, 2016. Note holders have an option to either redeem their notes on the Maturity Date or extend the maturity of their notes to July 18, 2019. The interest rate on the original note is 6.75% fixed for two years and 7.75% on the Extended Notes.
JMMB made profit due to the group’s shareholders of $2.83 billion for the year ending March 2014 and had total equity of $18.3 billion.
$100m of Scotia Group trade cancelled
In Mondays trading on the Jamaica Stock Exchange, MVL Stockbrokers purchased 5 million Scotia Group shares at $20 each, amounting to $100 million. Towards the end of the close in the market, the trades were no longer posted.
A check with the manager of the stock exchange Marlene Street Forrest, stated that “the matter of the trade was brought to my attention and on checking it was discovered that the broker incorrectly entered the order as 5 million units when it should have been 500,000 units. Based on the investigation done and the information gathered, all the selling brokers were contacted to get there approval about the cancellation. This is the norm is such cases, where cancellation is contemplated as such the trades were reversed”. Instructions were given to place orders for $5 million each of Carreras, National Commercial Bank and Scotia shares, Ed Mckie of head of MVL Stockbrokers informed IC Insider. The orders were on behalf of an institution not a pension fund, IC Insider was advised.
In early trading in the market today, there were three significant bids to buy 5 million units of each Carreras at $34, National Commercial Bank at $18 and Scotia at $20. Scotia trades were the only one executed, the other bids were withdrawn before any trade took place. At the end of trading none of the Scotia Shares were traded and the bid was removed. In all likelihood the bids for the smaller quantities will resurface shortly.
5m share orders for Carreras, NCB & Scotia Group
MVL Stockbrokers are in the market early Monday with three significant bids to buy Carreras at $34, National Commercial Bank at $18.12 and Scotia at $20.
The bids are for 5 million units of each of the stock. So far they bought all but 1,700 of the 2,618,405 Scotia Bank Shares at $20.
Information gleaned recently is that a pension fund was in the market for large blocks of shares and the bids of such size could be connected with the pension fund needs.
On Friday, Scotia Investment bought all the Scotia shares to tradefor parties connected with the brokerage house.
CWJ revenues rise 37% push CWC Plc
Cable & Wireless Jamaica grew mobile customers with continued momentum from last year, by 37 percent, Cable & Wireless Communications PLC (CWC) said in a press release, in their first quarter interim management statement for the June 2014 quarter.
The Jamaican growth, pushed the mobile customers in Jamaica to around 750,000 at June, up from 705,000 at March this year and helped to move mobile subscribers was up 20 percent, for the overall CWC group on like-for-like basis, the statement indicated. “LIME growth was driven by continued strong subscriber additions in Jamaica, where revenue grew 34 percent at constant currency”. For the June 2013 quarter, the Jamaican operations saw growth of 22 percent in mobile customers and 10 percent increase in revenue. The growth last year came at a jump of 64 percent in subscriber acquisition cost, the company said last year after the completion of the June quarter.
Group Trading Performance| CWC said that mobile revenue which now represents 55 percent of Group revenue, was up 4 percent across the Group in the First Quarter, with increases in Cayman of 11 percent, following the successful introduction of LTE services; and in Panama 5 percent, where increased advertising drove mobile data 21 percent. Panama also achieved mobile ARPU growth for the first time in five quarters following increased focus on pricing.
Broadband and TV revenue, hampered by slower network speeds, grew only 3 percent and this is a key area where we expect to see improved performance over time as a result of the investments we are making under Project Marlin. The modest growth in Broadband and TV was more than offset by continued decline in fixed voice revenue.
Revenue in the B2B/B2G business – Managed Services – was impacted by reduced Government activity in Panama ahead of elections in May, but CWC management say they remain confident that the new management team and organisational focus will come to fruition later in the year. BTC in the Bahamas delivered solid financial performance alongside improved network reliability during the quarter.
Upgrade| CWCP said “we have upgraded 126 of our mobile sites in Jamaica since 1 April 2014 and expect to complete our 4G network later this year. The fibre build-out in Cayman is complete with over 11,000 homes passed. In Barbados we have now passed 26,000 homes with high-speed fibre. In Panama we successfully launched Direct-to-Home TV and ‘Movil Cash’ products, and, although it is early in the programme, we are exceeding our sales expectations”.
