Trinidad’sFirst Citizens Bank reported profit of $773 million before taxation for the year to September compared to $745 million in 2013. Profit after tax, amounted to $627 million in 2014, up 2.9 percent over the profit of $609 million of 2013.
For the October 2014 quarter pre-tax profit rose 9 percent over 2013 to reach $180 million from $165 million but profit after tax for the quarter was virtually flat at $149 million versus $145 million in 2013. The information was included in an abridged version of the bank’s results for 2014.
Citizens had assets of $34.9 billion at the end of September marginally down from the $35 million at the end of June. Since June customer deposits fell from $26.5 billion to $25.7 billion. The bank did not report details on loans at September. At the end of June this year, there was no growth in this asset which stood at $13.75 billion, slightly down on the amount at September 2013 and is hardly likely to have changed much since with flat assets.
Earnings per share amounted to $2.50 for 2014. The stock remains on the Buy Rated list with earnings per share of $2.75 projected for 2015 and a target price in the around $45.
A final dividend of 61 cents per share payable in December was declared, and it brings the total for the year to $1.18, up from $1.09 per share paid as the final dividend for the 2013, the amount was paid in January 2014.
The dividend policy of the Citizens is to distribute to its ordinary shareholders funds surplus to the operating capital and strategic requirements of the Group, as determined by the Directors, with an annual target dividend pay-out percentage range of 45 to 55 percent of net profit after-tax.
The company was listed on the Trinidad and Tobago Stock Exchange in September 2013, after a successful public share issue.
First Citizens 2014 profit up slightly
Eppley goes to Market again
Eppley goes to Market again, this time to raise between $150 million and up $250 million by way of an additional amount of the 2019 preference shares. The yield will initially be 10 percent for the first two years, with step of rates thereafter.
According to the company, “as a result of excessive demand for the cumulative redeemable preference shares of the Company due 2019 (the “2019 Preference Shares”) for which subscriptions were invited subject to a prospectus dated 4 November 2014, the Company now invites further Applications for subscription for 25,000,000 additional new 2019 Preference Shares in the capital of the Company”. JMMB Securities Limited is acting as lead broker and listing agent to the Company in the Invitation. The Company reserves the right to make available further 2019 Preference Shares prior to the Closing Date.
The Company reserves the right to issue up to 41,666,667- 2019 Preference Shares in the event that the Invitation is oversubscribed by applicants and on that basis the total consideration for the subscription of such shares would be greater than $150,000,000 but will not exceed $250,000,002. The issue opens on Tuesday 16 December and closes Tuesday 23 December 2014 with the shares being issued at $6 each.
The Company already has accepted applications for the issue of 58,333,334 – 2019 Preference Shares by way of prospectus dated 4 November 2014 however these shares have not yet been allotted and as such, at the date of this Prospectus there are no holders of the 2019 Preference Shares as yet. It is the intention of the Board that any 2019 Preference Shares for which Applications are made pursuant to this prospectus, or for which applications were successfully made pursuant to the earlier prospectus dated 4 November, will be allotted simultaneously by the Company. The shares are expected to be listed on the junior market of the Jamaica Stock Exchange.
Cable & Wireless acquires Dekal Wireless
Cable & Wireless Jamaica (C&W) advised that a member of the CWC Group of companies entered into an agreement to purchase all the shares in the parent company of Dekal Wireless Jamaica on November 9, 2014.
Subject to the relevant regulatory approvals, Dekal Wireless Jamaica Limited will in the interest of efficiency be operated by Cable & Wireless Jamaica. Dekal Wireless the release said is a licensed provider of wireless internet services to rural Jamaican communities. C&W further stated “that this collaboration will increase internet availability to previously under-served communities; improve prepaid internet accessibility via laptops, tablets or smartphones to more consumers, islandwide.”
This is the second company to be acquired by the CWC group within a matter of a month.The acquisition will add customers and income to C&W and help to cut overhead cost in the new acquisition.
NCB 2014 profit trumps 2013 by a KM
National Commercial Bank net profit for 2014 hit $11.6 billion, a big jump from the NDX affected $8.58 billion in 2013. Earnings per share for the year ended at $4.73 just below IC Insider forecast of $4.80.
The 2013 profit was negatively affected by a huge $1.5 billion charge, from losses picked up when they exchanged high yielding government bonds for lower yielding ones and $680 million written off relating to the attempt to list on the New York Stock Exchange. The group is reporting net profit of $2.87 billion, for the September quarter compared to $1.8 billion in 2013, the latter was affected by a number of one off charges.
The 2013 full year was also negatively impacted by a $281 million hit from receivership expenses, an increase over the amount spent in 2012 of $172 million and a healthy rise in Technical, consultancy and professional fees of $1.09 billion compared with $846 million in 2012.
This year results benefited from a few one off items as well. Gain on acquisition of subsidiary contributed $301 million and gain on sales of shares in Kingston Wharves added $349 million but this is in lieu booking their share of profits for the quarter had they not sold. The group suffered a loss of $200 million on securities impairment and critically, although loan loss provision is up $200 million, the large increase in the final quarter is $700 million more than at the same time in 2013. For the full year, loan losses amount to $2.2 billion versus $2.1 billion for the previous year.
Salaries allowances and benefits cost was down in the quarter to $2.6 billion from $2.9 in the similar quarter, and for the year to $11.5 billion versus $11.2 billion in 2013. Other operating cost was up to $10.4 billion for the full year, from $9.4 billion in 2013 and for the quarter $3.1 billion from $2.8 billion.
Growth| For 2014, loans grew pretty strongly by 12 percent, moving from $143.6 billion to $157 billion and customer deposits of $202 billion, increased by $23.8 billion, or 13 percent, resulting in net interest income being steady, in the September quarter, for both years, as well as in the June quarter at roughly $6 billion each. Net interest income was up $1 billion for the year over 2013 to reach $24.66 billion from $23.56 billion. Fees and commission income moved up to $10.6 billion net, compared to $9.7 billion in 2013. Premium income grew to $7 billion from $5 billion in 2013. Gains on sale of debt securities and foreign exchange trading gains jumped to $2.6 billion versus $1 billion in 2013.
Segment| Segment results were mixed with strong increases in some, while other areas fell below the 2013 performance. Retail & SME, reported improved profits for 2014 of $1.56 billion versus $793 million in 2013. Payment Services climbed down from $2.1 billion to $1.57 billion in 2014, Corporate Banking ended 2014 with $500 million versus $850 million previously, Treasury & Correspondent Banking jumped from $1.87 billion in 2013 to $3.7 billion in the latest year. Wealth, Asset Management and Investment Banking moved down from $3.88 billion to $3.6 billion, Life Insurance and Pension Fund Management climbed from $2.17 billion to $2.9 billion and General Insurance income of $557 million in 2013 jumped to $1.28 billion.
NCB hiked their final dividend for the year to 96 cents per shares. IC Insider’s forecast for the 2015 earnings is $5.75 per share and with the current price at just over $18 per share the stock is severely undervalued with significant upside potential.
More insider buying at Sagicor
Sagicor Group have been enjoying trades by insider on several occasions this year. The group recently advised that a director purchased 249,648 shares between November 27 & December 1, this year.
The last time before this that an insider traded in the company’s stock was in October, when the company advised that an executive Purchased 417,016 shares under the SGJ Executive Long Term Inventive Scheme on October 24, 2014.
The financial group saw a sharp fall in profit in the quarter, from $1.56 billion to $1.1 billion and net profit of $3.84 billion, with $3.79 billion available to stockholders, for the nine months to September, which was 2.5 percent better than in 2013. the decline in profit in the September quarter is due primarily to cost associated with the acquisition of RBC Royal Bank local operation at the end of June this year. With staff reduction, branch closures and amalgamations, the losses in the acquired banking operation should be sharply reduced from that in the September quarter.
$1.2B gaming losses force SVL to act
$1.2 billion is the number for losses at the Gaming and Hospitality segment at Supreme Ventures Limited Revenues in three years. Losses worsened from $252 million in 2012 when it jumped to $553 million last year but was down to $376 million up to September this year from $440 million in 2013.
There were no noticeable improvements in the losses in the September quarter. The substantial losses amounting to 47 percent of profit in the lottery segment in 2013 and 31 percent in 2014, with no noticeable reduction in the losses, forced management hands to take action. The losses in this segment coupled with losses in sport betting, contributed significantly in negating the profits from the lottery segment.
On December 1, (SVL) advised that they will close operations at the Odyssey Gaming Lounge at Market Place in Kingston and Castle Gaming Lounge VLT operations, in Portmore on December 1. SVL advised that the Lottery and Sports Betting Unit at the facility in Portmore will remain open for normal business operations and that it will focus all its energies on the flagship gaming lounge – Acropolis Barbican, with enhancements to its offerings in these locations.
The company further advised, that it will focus its energies on the continued development, of what it says is its profitable Acropolis Gaming Lounge. Over the next two to three months SVL will be expand the gaming floor, along with greater focus on improving the customer experience through wider game options, increased payouts and improved food & beverage offerings. The consolidation will result in a re-allocation of staff and other resources to meet the expanded needs at Acropolis Barbican. However, approximately 20 positions will be made redundant, after a reallocation of staff resources to meet the new needs at Acropolis Barbican. Will those changes be enough to eliminate the more than $500 million loss in the segment is left to be seen? The move should reduce the losses going into 2015 with less rent and staff cost.
The company also has to deal with the Sports betting losses which worsened even as revenues climbed from $177 million in 2013 to $418 million in 2014. The sharp growth in sports betting is attributable to betting on world cup football games. The segment lost $87 million in 2013 and $148 million in 2014 so far.
Big profit recovery at Salada
Salada Foods lost money in the final quarter of their 2013 fiscal year to September, but enjoyed a major turn around this year in the same quarter, with profit rising to $60 million after tax, from a loss of $5 million.
On the pretax basis, the change was even more impressive, with a loss of $20 million last year to a profit of $62 million in the September 2014 quarter. The final quarterly results, helped to change the fortunes of the company from declining profit for the nine months ending June this year, versus 2013 to a 19 percent increase to $105 million for the year to September this year from $88 million in 2013. The operations for the Roberts brands, Mountain Peak Processors and Primora Company reduced the pretax profits with losses of $33 million for the year, from revenues of just $8.3 million and $4.4 in 2013. Salada ended with earnings per share of $1.01.
The impressive last quarter earnings, flowed from a doubling in sales moving it from $143 million in 2013 quarter to $297 million, this year. Sales revenues grew 16 percent for the year to $736 million up from $634 million in 2013. While sales rose, interest income fell in both the quarter and the full year. Administrative expenses climbed 92 percent in the quarter and 17 percent for the year to September, but sales and marketing cost fell in both periods.
Salada changed distributorship at the start of the year. Prior to the change, the company was concerned that the former distributor was holding high levels of inventories of their product. The falloff in sales earlier in the year, the sharp uptick in the September quarter could be attributable to excess supplies in the market for coffee, being removed. The sharp increase in sales in the September quarter, should lead to higher income in the December quarter and the rest of the 2015 financial year and should raise earnings to the $1.60 per share level.
Receivables climbed from $67 million in 2013 to $240 million of which $201 million is owed for 30 days or less. Inventories fell from $251 million in 2013, to $227 million in 2014 but the composition is vastly different. While raw materials in 2013 amounted to $162 million, is now down to $93 million at the same time finished goods and work in progress at $44 million and $67 million respectively compared to $28 million and $36 million at the end of the year. The increase in finished goods and work in progress, along with the healthy receivables position, suggest that the sales in the September quarter are sustainable.
At the year-end cash is at $75 million accounts payable at $99 million with no interest bearing debt.
Investors can expect to see some recovery in the stock price that is now at $6.50 having fallen from $10 earlier in the year with the lower profits up to June.
the company announced that the directors would be meeting on December 5, to consider the payment of a dividend.
138 Student Living gets money
138 Student Living Jamaica received the full amount they sough from the capital market, when the initial public offer, was fully taken up at the close of the offer, on Thursday 4 December, JMMB Securities Ltd reported to the Jamaica Stock Exchange.
According to a release from the brokers “all of the Ordinary Shares and Preference Shares offered for subscription by the Company, valued at $500m in the aggregate were fully taken up. All Applicants will receive a full allotment of the amounts that they applied for.”
The Company offered 82,900,000 Ordinary Shares at $4 each and initially, 33,680,000 subject to an option to increase the amount up to 60,000,000 Cumulative Redeemable Preference Shares at $5. In addition shareholders of the company offered for sale 15,716,667 ordinary shares at $4 each to raise $62.8 million and received $31.3m.
The Company will now apply to the Jamaica Stock Exchange for the listing of the Ordinary Shares and the Preference Shares on the Main Market of the JSE.
Scotiabank T&T full profit recovery
Scotiabank reported an 11.75 percent increase in their loan portfolio for the year to October as loans reached $11.8 billion. Most of the growth took place after April and helped to push up revenues and profit in the second half of the year.
At mid-year to April loans, climbed from $10.575 billion at the end of October last year to $10.85 billion, growing by only 2.6 percent, well below the yearly growth to October. At the fiscal mid-point, profits were down in both the April quarter and the half-year, versus the prior year periods. Net income after tax for the July quarter, amounted to $140 million, an increase on the $134 million earned for the same period last year.
For the nine months to June, profits fell to $390 million from $404 million, but it represented an improvement over the decline in the six months results, with profits of $250 million versus $270 million in 2013. The second quarter results of $105 million compared with $128 million, in 2013, was one of the factors pulling down the results, as net revenues fell compared with the prior year.
With things starting to look up from the June quarter, the bank rolled out a respectable 11 percent increase in their October quarter profit after tax to hit $170 million versus $153 million in the same quarter in 2013 and a slight increase in the full year results which moved from $557 million to $560 million.
Loan loss provision rose from $4 million in 2013 to hit $28 million in 2014 and $9 million for the October 2014 quarter. Non-interest expenses were held tightly with virtually no increase in the October quarter with $173 million versus $172 million in 2013 and for the full year $639 million versus $612 million.
Banks make the bulk of their income from lending. If good loans are growing profits will usually grow if not, profits will tend to be much harder to grow. Loans grew 10 percent between July and October or 20 percent annualised but the growth in the October quarter was a more tepid 3 percent or at the rate of 12 percent per annum. This lower rate could well be a more sustainable level going forward, which will be enough to result in increasing profit at a reasonable pace.
Based on the last quarter results, investors should be looking at earnings per share climbing from $3.17 this year to be in the $4 region next year, as the bank overcomes the poor first half of the 2014 fiscal year.
The major concern, has to be the impact that the sharp fall in world oil prices will have on the Trinidad’s economy and the effect on the bank. That is something worth watching. Additionally, interest rates have been moved up, by the country’s Central Bank and could go higher, in the 2015. Rising interest rates can be negative for stocks.
Minimal branch closures at BNSJa
Jacqueline Sharp CEO of Scotia Group
Sharp was addressing the press, in providing an update on the group’s operation for the year to October. The local group closed their Westgate and Barnett street branches, with the opening of the new branch at Fairview, just outside of the old Montego Bay city centre. “The main branch in Sam Sharp’s square remains open. Due to the limited branch closures no provision was made in the 2014 accounts and the staff at the closed branches were absorbed within the group,” Sharp said.
The Canadian parent had announced closure of branches and staff cut of 1,500, to trim cost and better align branches with customer demand. But Sharp stated that the local operation was always looking at ways of making the operation more efficient and will focusing on this aspect going forward.Business as usual locally, comes against the back ground of Scotia Group making profit of $10 billion versus nearly $11 billion in 2013, but more importantly, the banking operations made profit of $3.935 billion vs $3.99 billion in 2013 after absorbing additional asset tax cost of $260 million.
