Company Results — Page 66

Barita reports big profit jump

May 25, 2015 by IC Insider.com

Brokerage house Barita Investments released half-year results showing profit of $130 million or 29 cents per share versus $105 million in 2014, the improvement came in the second quarter with profit of $84 million, or 19 cents per share, up from $48 million, fuelled by a big jump in investment gains, mostly from disposal of government of Jamaica securities.
Net interest income fell in the quarter as interest cost declined more slowly than the fall in income. For the quarter revenues climbed to 398 million from only $333 million in 2014 while operating expenses rose from $115 million to $128 million or 11 percent. Interest cost fell from $171 million to $151 million but interest income fell faster from $260 million down to $204 million, for a fall of $55 million thus squeezing net interest income from $88 million to $53 million.

Karl Lewin at the launch of Barita’s newest unit trust funds

Gross Interest Income of $434 million for the half year to March was 17 percent below the prior year’ six months, while interest expense for the period was $319 million, 5 percent less than the previous year. The declining spread is partly due what the company stated as, “50 percent of bonds held being variable rate instruments and declined faster than on the liability side that are mostly fixed.”
Revenues from our non-interest income for the six months were above prior year with $309 million compared to $141 million with fees and commission income being 88 percent above prior year at $79 million with significant improvements coming from the revenues of the Barita Unit Trusts Management Company. Additionally, trading gains improved by 813 percent at $179 million compared to $21 million in the prior year, due to gains from sales of government of Jamaica bonds that enjoyed gains as Jamaican bonds started to attract renewed interest. Depreciation of the Jamaican Dollar and trading gains amounted to $42 million year to date down from $72 million in 2014.
“Operational costs for the 6 months period to March increased by 14 percent when compared to the same period last year. Over the same period, staff costs increased by 12 percent, triggered primarily by additional human resources and remuneration adjustments,” the company reported.
Administrative costs were 16 percent higher for the same period last year; the main contributors being our financial support of the Education Foundation and client support expenses.
Looking forward, earnings look set to reach at least 50 cents per share for the year and could be more, depending on the continued buoyancy in the stock market that should help lift commission income from trading for clients, increased stock market prices will increase the asset base of the equity lined unity trusts and generate more fee income. The revaluation in the Jamaican dollar in to March has been reversed thus restoring gains in this area. The decline experienced in interest rate spread may slow but that is unclear at this stage with rates on BOJ Certificate of deposits having fallen and Treasury bill rates continuing to decline.
The quarter ended with equity of $1.86 billion and total assets of $13.37 billion. The stock which is listed on the Jamaica Stock Exchange and last traded at $2.50 up from $1.95 prior to the release of the results.

Filed Under: Buy Rated, Company News, Company Results

Derrimon profit jumps 83%

May 22, 2015 by IC Insider.com

Derrimon Trading profit climbs 83 percent in the March quarter to $20.5 million although sales declined by 4.8 percent in in to $1.296 billion. Despite the sale decline, gross profit increased 17 percent from $142 billion to $166 billion.Other income declined from $12.6 million down to $5.5 million and distribution expenses fell $2.5 million to $21.7 million but administrative expense were up nearly $5 million to $119 million, interest cost rose from $14.9 million to $18.88 million. The company’s shares of associated company – Caribbean Flavours and Fragrances results contributed $8.36 million to the net results. There was no ownership of the associate in the similar period in 2014.
Decline in sales is not what investors want to see from a company, even when profit rise, looking forward increasing sales is what is going to drive profits and stock prices.
During the quarter under review, the directors approved the acquisition of the assets of Northern Cash and Carry as part of the strategy to expand the Sampars footprint at strategic locations island wide.
The financial structure remains a bother and places the company at a high level of risk with debt of $657 million including preference shares of $250 million and equity of only $380 million. Of the total loans, $335 million are short term and due within a year. There is also cash funds of $81 million but with the new acquisition approved, some of the cash is likely to be used to fund the purchase. With the short term loan due within a year, the company will have to restructure the loans as it is not producing the type of cash flow that would facilitate repayment from internally generated funds. In short, the company needs more equity capital or it ought to have a hybrid of debt, with an option to convert to equity at some point in time in the future.
Earnings per shares ended at 8 cents for the quarter and should end at around 32 cents for the year. The stock traded last on the Jamaica stock market at $2.15 putting the PE at 6.7 times earnings, not leaving much room for growth in the current market environment and valuation of junior market companies at present.

Filed Under: Company News, Company Results Tagged With: Derrimon Trading, Sampars

T&T Stock Exchange fowls up FCB report

May 20, 2015 by IC Insider.com

We carried the following report on the poor level of reporting of First Citizen Bank (FCB) of Trinidad and Tobago when we castigated management their poor reporting to their shareholders, with the release of the March quarterly results and wondered why the Trinidad and Tobago Stock Exchange accepts such substandard reporting.
We stated that afterall, information is what creates good markets. When various parties in markets get relevant information at once, then they have a far better idea where to price a security.
First Citizens contacted IC Insider and informed us that they did in fact submit the correct information to the Trinidad and Tobago Stock Exchange, unfortunately, the exchange copied the unconsolidated report and posted it on their website. The report gave wrong information on the banks operation but it remained posted until our article came to the attention to the bank and the Financial Securities Commission in that country the bank advised us. The bank indicated that the large increase in other income reported below represents a divided paid by a subsidiary to the group company.
Stock exchange staff must understand that they are handling price sensitive information that can result in huge gains or losses for some, accordingly, special care need to be taken, to ensure that information they release to the public reflect accurately what has happened. The TTSE did not take care in positing the report and to think that the error remained there for days is alarming.
First Citizens actual Q2 results. The bank in fact made profit of $148 million for the quarter, slightly higher than the $146 million made in 2014 and $326 million in the six months, an increase of $5 million, from revenues of $290 million for the quarter and $578 million for the half year, in net interest income, with other income coming in at $150 million for the quarter and $294 million for the six months. Earnings per share is $1.30 for the six months, just ahead of the $1.28 in 2014. The most encouraging feature for the bank is the continued growth in loans which moved from $11.57 billion to $12.9 billion. Lending is the area that increased profits are to come from if there is growth of good quality loans. Shareholders’ equity stands at $6.4 billion at March and customers’ deposits at $26.7 billion. With lending translating hovering around half of the deposits, the bank will be unable to optimize the profits as the spread between loans and deposits are usually higher than on money market instruments.
The following is the rest of the report which was carried. It is puzzling that FCB latest interim report states that it is prepared in accordance with IAS 34 interim financial reporting but on examination it shows that it has not fully comply and it falls down badly in two critical areas.
Here is and extract of IAS 34 says – “If the financial statements are condensed, they should include, at a minimum, each of the headings and sub-totals included in the most recent annual financial statements and the explanatory notes required by IAS 34. Additional line-items or notes should be included if their omission would make the interim financial information misleading.”
“The explanatory notes required are designed to provide an explanation of events and transactions that are significant to an understanding of the changes in financial position and performance of the entity since the last annual reporting date. Examples of other disclosures required [IAS 34.16A] changes in accounting policies explanation of any seasonality or cyclicality of interim operations unusual items affecting assets, liabilities, equity, net income or cash flows.”

Earnings per share is one such line item for listed companies in their audited financial statements, accordingly, any compliance with the standard would see earnings per share calculation shown in the interim report. Certainly the big bump up in income is of an unusual nature that requires some explanation. Regardless of the accounting standards prudent management would certainly want their shareholders to understand what is happening in their company.
First Citizens Bank posted a big jump in earnings for the March quarter of this year, but there is not even one line giving an indication as to what resulted in the huge jump. Is it one off, is it sustainable nobody seems to know or worse nobody seems to care, not the company not the stock exchange, not the Financial Services Commission? Just nothing for investors to digest. The income statement shows a line item for net interest income of $211 million for the quarter but an item 3 times that size is listed as other income. What insensitivity? As John McEnroe once screamed at a tennis referee, you can’t be serious. As a result of this big jump in other income, more than twice the $298 million they raked in in the same period in 2014, and more than they hauled in in all of the 2014 fiscal year of $537 million the amount is just $5 million more than the net income for the quarter after tax of $630 million. In 2014 for the similar quart profit was $292 million.
For the six months the bank is reporting profit of $728 million up from $378 million but one would be led to believe the numbers are suspect for thy seem too good to be true and begs the question as to their sustainability, bearing in mind the flat first quarter numbers. It is only in looking at the segment results that one can glean a bit of where the increased profits are coming form that does not show what caused the big income gain. The company’s net income for banking was virtually flat compared to 2014 for the six months but treasury and investment banking saw a big leap in net income to $661 million from $289 million, the source of the increased profit.
The problems don’t stop there. Investors in the stock market need to know the earnings per share even more than the absolute profit in order to easily value the shares, a search throughout the document reveal no such item but the situation get even worse than that the company has not even paid investors the courtesy of including in the document, the total issued shares so they can compute it easily.
Exchange web site, the bank has 251,353,562 shares issued, putting the earnings for the six months at $2.50.
Citizens had had several missteps since going public. First they miscalculated the closing date incorrectly, as it fell on a public holiday and it was put back which was not needed as it was heavily oversubscribed and could have closed ahead of time, secondly the date for listing was pushed back thus tying up investors’ money longer than was stipulated in the prospectus. The company also suffered some uncomfortable moments when it was discovered that a manger bought up large amounts of shares beyond his or her allocation in the scarce IPO issue.
The stock traded at $35.80 on Friday but has hardly moved since the results were published an indication that investment don’t see the big jump in profit as sustainable.

Filed Under: Company News, Company Results Tagged With: Earnings per share, IAS 34 interim financial reporting, John McEnroe, Trinidad and Tobago Stock Exchange

Cargo Handlers a nice income generator

May 19, 2015 by IC Insider.com

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Cargo Handlers stock has passed the $22 mark but could well go higher based on the earnings being generated. For the six months to March the Montego Bay based company racked up profit of $78.6 million, 52 percent higher than in 2014 and $38.47 million, up by 48.4 percent over the similar quarter of 2014.
The good net income came from operating revenues that were up 29.8 percent in the quarter to 62.7 million and 126.2 million in the six months an increase of 29.5 percent. Expenses were kept well below revenues growth at $26.16 for the quarter versus $22.5 million and for the year to date $49.3 million compared with $48 million.
Earnings per share for the quarter is 92 cents and $1.89 for the six months, the company is well on its way to rake in $4 per share for the year ending September.
The company had cash funds of $138 million at the end of March owes very little to creditors with an equity base of $231 million.
The company is primarily involved in stevedoring services and haulage of fuel and the shares trade on the junior market of the Jamaica Stock Exchange and has gained 39 percent since the start of the year.
The company paid an interim dividend per share of $1.25 on March 11, 2015 and $1.30 on September 16, 2014.

Filed Under: Buy Rated, Company News, Company Results Tagged With: Cargo Handlers, junior market

ANSA Merchant Bank profit up 70%

May 19, 2015 by IC Insider.com

ANSA Merchant Bank and its subsidiaries reported a 70 percent increase in profit for the first quarter to March this year, compared to the first quarter of 2014. The quarter ended with consolidated operating profit of $53.8 million versus $31.6 million for the similar 2014 quarter and resulted in earnings of 50 cents per share, up from 26 cents in 2014. In 2014 the group reported earnings of $2.43 per share for the twelve months but should exceed that level in 2015.
The stock is listed on the Trinidad & Tobago Stock Exchange and last traded at $38.91, with a PE of 16 based on 2014 results and less, based on what the latest numbers are suggesting, in terms of full year profit for 2015. Examination of the 2013 and 2014 results, show no clear pattern of consistency quarter over quarter for earnings, but the last quarter of the year appears to be one in which profit tends to exceed $1.20 per shares, accordingly, the 2015 earnings could be around $3 per share and if achieved would result in a PE of 13.
The Banking segment produced earnings before tax of $33 million for the first quarter representing a 5 percent increase over the first quarter of 2014. Mutual Funds performed better in the reported quarter compared to 2014 with a small profit of $949,000 versus an $8 million loss, in 2014. The general insurance business produced net earnings of $22.7 million in the quarter, a 47 percent increase over the prior year. The life insurance business experienced a loss in of $2.2 million but an improvement over the loss of $7.2 million in the similar quarter of 2014.
Revenues climbed 21.3 percent to reach $172 million while expenses rose by a more sedate 7.3 percent to hit $118.3 million and helping to push up the profits
The equity capital stood at $1.9 billion at the end of March and total assets of $6.7 billion. ANSA McAl a Trinidad Company owns 82.48 percent of ANSA Marchant Bank group.

Filed Under: Buy Rated, Company News, Company Results Tagged With: Ansa Mcal, Trinidad&tTobago Stock Exchnage

Palaces’ $22M profit swing

May 18, 2015 by IC Insider.com

Profit before tax for Palace Amusement Company had a major swing around of $22 million for the nine months to March this year to $6.8 million compared with a loss of $15.6 million and for the quarter a profit of $1.6 million was made, up from a loss of $9 million.

Patrons lined up at Palace’s Multiplex in Montego Bay

Revenues grew by 9 percent for the nine months to $650 million helped by strong growth in the March 2015 quarter that saw revenues increasing 12.7 percent year over year and 19.4 percent when the numbers for the Odeon Mandeville cinema that was closed late 2014 revenues are excluded. In the quarter revenues came in at $209 million from what is said to be more appealing movies than in 2014. There was minimal increase in administrative expenses while direct expenses rose less than revenues at 5.5 percent for the year to date and 10.8 percent for the quarter.
IC Insider is forecasting earnings of $24 per shares on much higher revenues in the June quarter than in the March quarter, with around 50 percent of the increase flowing to the bottom line as administrative cost should be held close to what obtained in the March quarter and losses that were incurred I the Mandeville operations removed.
Palace ended with cash funds at $66 million and has borrowed loan of only $25 million and equity of $280 million. The stock which is listed on the Jamaica Stock Exchange hardly trades with only 1.4 million units issued and closed last at $80.

Filed Under: Company News, Company Results Tagged With: Palace Amusement

D&G profit nearly doubles in Q3

May 18, 2015 by IC Insider.com

A combination of increased sales’ volume and price adjustment saw Desnoes & Geddes, the producers of the world famous Red Stripe beer, enjoying a 20 percent jump in sales revenues in the March 2015 quarter.
Sales reached $2.96 billion and a near doubling in profit to $367 million for an 88 percent increase from $196 million in 2014. For the nine months to March profit was up a more sedate 29 percent on a 14 percent sales increase to $9.6 billion over 2014.
Local sales rose 20 percent in the March quarter and exports were up only 6 percent, for the year to March exports grew 11 percent and local sales 13 percent.
Earnings per share for the quarter came in at 13 cents and 54 cents for the nine months and should end at 80 cents for the full year and $1.05 for 2016 fiscal year. Gross profit margin increased during the nine months period to 41.4 percent from 39.94 percent and 37.7 percent during the quarter from 36.2 percent.
The March quarter saw a turnaround in the results of the distribution company it’s a joint venture partner with Pepsi in, which contributed $20 million in the quarter compared with a $47 million loss in 2014 and for the nine months, losses increased to $62 million from $46. Marketing cost jumped to a billion for the nine months from $737 million in 2014. Other costs were held fairly tight.
The period ended with net fixed assets increasing by $1.5 billion but the company still ended with cash funds at $1.38 billion and equity of $9.4 billion.
The stock is listed on the Jamaica Stock Exchange and closed last at $7.20, with a PE ratio of 9.

Filed Under: Company News, Company Results Tagged With: Desnoes & Geddes, Jamaica Stock Exchange, Red Stripe Beer

Pulse 29% increased profits

May 17, 2015 by IC Insider.com

Pulse Investments netted profit of $165 million on revenues of $353 million for financial year ended June 2014 increasing 27 percent on $128 million earned in 2013. Revenues increased slightly by 2 percent from $346 million in 2013. The profit includes fair value gains on investment property amounting to $96 million versus $78 million in 2013.
The increase in profit was due to a combination of better cost management and revenue increases in some areas of operations and a fall in administrative and other expenses by 18 percent, from $211 million in 2013 to $173 million in 2014. Property rental income increased by 27 percent, from $30.9 million in 2013 to $39 million in 2014. Earnings per share increased from 46 cents to 59 cents, in 2014 compared to prior year.
Bank loan and overdraft debt declined $1.2 million from June 2013 to $26.3 million in 2014. Net cash generated by operating activities was down slightly from $27 million in prior year to $25.7 million, Cash in hand at year end stood at just $10 million.
The company’s shares were suspended last year by the Jamaica Stock Exchange for the late filing of audited financial statements as well as quarterly statements. While one can possibly see to some reasoning for the lateness of the audited accounts, there can be no excuse for the late filing of quarterly reports as they are not dependent on the audited figures.
There are a number of negatives for Pulse and its investors one is the low level of cash inflows compared with the revenue and profit, creating a problem for investors in not being able to get dividends. The real estate investment which consumed relatively large amounts of cash will need to throw off more cash going forward to make the stock more appealing to investors. The on again off again listing and suspension of listing and the very late financial reporting are very negative for the stock and reflects badly on management, including the directors.

Filed Under: Company News, Company Results Tagged With: Pulse Investments

Point Lisas undervalued shares

May 17, 2015 by IC Insider.com

Profit before tax for Trinidad’s Point Lisas Port Development Companyand excluding the impact of fair value gains was $15.3M, an increase of 358 percent compared to the same period last year of $3.3M this flowed from a 19.6 percent growth in revenues. Including gains on valuation of investment properties the company reported profit of TT$67 million versus $36 million in 2014.
Volumes handled by the port grew strongly with the containerized cargo operations experiencing a 25 percent increase in volume but general cargo operations suffered a 13 percent compared to the levels recorded in 2014. The growth in containerised cargo resulted from a 10 percent increase in imports, an 11 percent increase in exports along with a 94 percent increase in trans-shipment cargo. For general cargo there was an 88 percent decrease in exports, a 7 percent increase in imports and a 320 percent increase in trans-shipment.
Direct cost rose faster than the growth in revenues with an increase of 29 percent. Administrative expenses remained relatively stable during the quarter at $21 million but other operating expenses declined to 158 million from $20.5 million.
The Group’s total assets grew to $2.33B in the first quarter of 2015, an increase of 3 percent from December 2014 when the asset base was $2.26B. Working capital continues to remain strong having improved from $49M at December 2014 to $65M in March 2015. The shareholders’ equity stood at “PLIPDECO will continue to embark on various endeavours as determined in its strategic plan. These include among other things infrastructural improvements, information technology upgrades (some already implemented during the first quarter 2015), and continuation of the Port expansion project. The preceding undertakings would further enhance efficiency and productivity to effectively position PLIPDECO in its drive towards continued growth$1.966 billion” Ian Atherly, Chairman of the company told shareholders in his report accompanying the quarterly results.
At the rate of income generation in the first quarter Point Lisas could earn around $1.70 per share excluding cap gains in 2015. The stock which is listed on the Trinidad & Tobago Stock Exchange and traded as high as $8.25 in 2007, last traded at $3.69. The net asset value of the stock is $49.60.
The stocks is undervalued and seems to be an interesting, IC Insider is maintaining a BUY RATED status on the stock.

Filed Under: Company News, Company Results, Real Estate, Stock Market Tagged With: Point Lisas, Point Lisas Industrial Port Development, TTSE

JSE profit surged – 2016 could be big

May 17, 2015 by IC Insider.com

Jamaica Stock Exchange reported a huge jump in first quarter earnings showing profit of $87 million or 62 cents, up from a loss of $3 in 2014, after tax. Revenues jumped from $82 million to $253 million, on the back of 10 fold increase in cess, due to primarily to the transfer of ownership of the controlling interest in Scotia Group, from the Canadian parent, to one set up to own the Caribbean entities directly.
Total cess income jumped to $161 million compared to only $15 million. Access Financial managing director switched ownership of his shares to a company, resulted in a transaction over the exchange of $1 billion and Pan Jamaican Investments had a $1.3 billion transaction in March. While the latter two unusual transactions would have increased the cess around $12 million, the cess for Scotia Group is estimated by IC Insider at around $120 million, leaving around $40 million as cess from normal ongoing operational activities. Trading values grew by 27 percent in the first quarter, including the two transactions in March. Fee income which rose by 67 percent would have been partially impacted by the big one off transactions, but increased value traded and a slight increase in listing fees would also have helped.
In the second quarter to mid May trading has increased 333 percent to $2.6 billion, the amount is equal to the total value traded for the entire second in 2014. The increased value of trading will lead to increased fees. In the 2014 second quarter, income from cess was only $10 million and fee income $45.5 million. Not only will the cess rake in more funds from the increased volume of trading now on the way but also from an increase in the rate charged for cess over the 2014 level.
While the increased trading activity so far will lead to increased fees for the second quarter, the potential income will be no more than around $100-120 million and will be sufficient to produce a profit for the quarter and help in lifting profit for the full year beyond $1 per share.
Looking forward, with more unit trust schemes being set up there will be more demand for stocks to satisfy the demand of equity funds. The Stock Exchange is poised to take over repo trading and acting as the registrar for them and result in additional fee income is going in the not too distant future, also of great import is that rising stock values increases the base for listing fees to be levied in 2016.
The exchange has cash and investments of $500 million with a working capital ratio of 2:1 and equity of $650 million. The stock remains IC Insider BUY RATED and is now available at $3.50 which it traded at on Friday, but won’t remain that way forever and investors should be buying this one for big long-term gains.