Freeport to distribute 40c per share

The former Jamaica Stock Exchange listing, Montego Freeport made $44 million in profit for the twelve months to March this year which is up strongly from nearly $11 million reported for 2017.
operating revenue was a mere $1.7 million while other income amounted to $101 million versus $36 million in 2017.  The financial data extract sent to shareholders does not break out the details of other income, but 2017, the category comprised interest income from investments and receivables for land sale and foreign exchange gains.
The statement of financial position shows shareholders equity at $710 million or $1.26 per share. Shareholders at the general meeting slated for November 30 will vote on a resolution to pay a capital distribution of 40 cents per share in December.

Sterling’s stock split effective November 27

Sterling Investments jumps to a high of $19 after split announcement.

The record date of the recently approved 5 for 1 stock split for Sterling Investments will be November 27, the company announced.
The split aimed at increasing the liquidity of the stock was approved by shareholders at an Extraordinary General Meeting on October 8.
Sterling’s most recent results to September, showed that the company’s fundamentals to be healthy, with gross revenues for the period hitting $134 million for the nine months to September 2018, an increase of 44 percent over revenues of $93 million in the similar period in 2017. Profit after tax grew 53 percent to $90 million for the nine months ended September, compared to $59 million in 2017.
For the September quarter, revenues rose to $56 million from $31 million in 2017, resulting in profit after tax for the quarter of $38.7 million versus $16 million in 2017. The 2018 result compares well with the full year results for 2017 when profit of just $52 million was realized from $92 million in revenues.
Sterling garnered $74 million in foreign exchange gains for the nine months period compared to just $11 million for the similar period in 2017 and $35 million versus $9 million in the quarter. Some of that seems set to be reversed in the final quarter of the year as the Jamaican dollar has since revalued and is unlikely to be reversed before year end.
The company reported that details of the upcoming rights issue will be announced shortly. IC gathers that the plan was originally, for the split to have followed the rights issue, but that seems to have changed with the announcement of the date for the split.
Shareholders’ equity increased from $895 million at September 2017 to $922 million at September 2018 while total assets under management amounted to $1.27 billion.
The stock last traded at $20.50 on the Jamaica Stock Exchange up from from $14.50 at the time the proposed split was announced in mid September.

Public gets small amount of Seprod shares

Some of Seprod,s product

Just under 92 million shares of Seprod were offered for sales by Facey Group in October and was oversubscribed. All applications for Reserve Shares in the offer were fully allocated, according to a release from NCB Capital Markets.
55 million shares were reserved for employees and directors and existing Seprod shareholders and the Lead Broker.
Subscribers from the general public will receive up to the first 5,000 units for which they applied, with the balance greater than 5,000 units allocated approximately 16.56 percent. The shares were priced at $23.99 each but trades on the Jamaica Stock Exchange at $39.

Profit up 10% at Wisynco

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Profit before taxation at Wisynco for the September quarter, increased or 15.7 percent to $928 million over the $802 million earned in the September 2017 quarter.
For the September 2018 quarter Wisynco Profit Attributable to Shareholders rose 10 percent to $769 million or 21 cents per share compared to $698 million or 19 cents per share for the corresponding period in 2017 when there were less shares issued.
Revenues for the quarter grew 12 percent to $6.8 billion over over the $6.1 billion achieved in the corresponding quarter in 2017. Gross Profit grew 10.4 to $2.6 billion or 10.4 percent over the $2.3 billion achieved in the same quarter of the previous year. Wisynco indicated that Gross Margin of 37.8 percent was slightly lower than the 38.4 percent for the corresponding quarter of the previous year due to the commissioning of the new beverage lines and the devaluation of the Jamaican Dollar.

Seprod shares attract nearly 4,000 applicants

Seprod shares sold at $24 each.

Many investors who applied for Seprod’s shares that were sold publicly in October will end up getting a relatively small allocation with nearly 4,000 applications chasing the 91.9 million Seprod shares that were offered for sale in October.
According to the release “Facey Group Offer of Seprod Ordinary Shares based on the broker’s preliminary numbers, the indication is that they received 3,799 applications.
NCB Capital Markets advises and due to the large number of subscribers for the Offer, the process is taking longer than anticipated.” NCB Capital Markets advised that it is in the process of reconciling the applications and verifying payments received and has requested approval to provide the Basis of Allotment on Monday, November 12, 2018.
Based on the number of applications, the average allocation would be around 24,000 shares each but with NCBCM allocated 10 million units the average falls to 21,000 units however 45 million units were set aside for exiting Seprod’s shareholders, staff, current and past directors.
The shares that were offered for sale at $24 traded on the Jamaica Stock Exchange today at $39 each.

Record profit for NCB Financial

NCB had a good 2018 fiscal year with strong profit gains.

NCB Financial Group recorded record net profit of $28.6 billion for the financial year ended September 2018 with net profit attributable to the group’s stockholders of $28 billion, an increase of 46 percent or $8.9 billion over the prior year.
Based on the results an interim dividend of 70 cents per ordinary stock unit will be paid on December 7, to stockholders on record as at November 23, 2018.
Importantly, loans and advances, net of provision for credit losses, grew by 70 percent over the prior year to $372.6 billion, but was helped by the acquisition in 2017 of the majority shares and the consolidation of Clarien bank in the group financial. The inclusion in the group’s financial increased the portfolio by over US$700 million the company indicated. For the year, “there has been sizeable growth in the Jamaican loan book totalling $56.1 billion”, the company said. In addition, credit card receivables increased by 14 percent and the Cayman portfolio grew by 67 percent. Non-performing loans totalled $18.2 billion at September 2018 (September 30, 2017: $5.4 billion) and represented 4.8 percent of the gross loans compared to 2.5 percent as at September 30, 2017. This increase was due to the inclusion of Clarien which has a non-performing loan ratio of 11.8 percent.
 Customer deposits increased by $196.4 billion or 68 percent, to $484.8 billion, again primarily driven by the consolidation of Clarien which has deposits in excess of US$1.1 billion. The Jamaican deposit taking segments accounted for a total combined increase of 18 percent, the report to investors stated.
According to the directors of the group “for the financial year, operating income grew by 29 percent or $17.1 billion, to $76.5 billion. The growth in income was primarily driven by: Gains from foreign currency and investment activities increasing by 102 percent or $7.9 billion, resulting from an improving macro-economic environment coupled with high levels of JMD liquidity and declining interest rates generating a high demand for debt securities. Increased net interest income of 18 percent or $5.4 billion. The improvement was primarily attributable to the consolidation of Clarien’s results and growth in the Jamaican loan portfolio. Net fee and commission income growing by 15 percent or $2.1 billion. $1.1 billion of the increase was due to the consolidation of Clarien. The improved fees earned by our Jamaican entities were driven by an increase in the number of corporate finance, investment and financing solutions offered by NCBCM. There was also growth in fees earned by our payment services, retail and SME segments stemming from increased e-commerce and credit transactions. A 14 percent or $1.1 billion increase in premium income.”
Profit for the last quarter was $7.3 million attributable to shareholders resulting in earnings per share of $2.97 with mots of it earned from ongoing operations. For the full year EPS is $11.39 and is swollen by approximately $2 from non-recurring gains. NCB seems on target to report earnings in the $12 region for 2019. The stock traded up to $135 on Thursday and last traded at $133 for a PE of 11 times 2019 estimated earnings. With the markets PE around 15 times 2018 earnings the stock should be trading in the $175 to $200 range by the end of 2019, with dividend payments adding close to $4 to the pot. NCB Group is set to benefit from a growing Jamaican economy for some years to come and is therefore a good medium to long term investment.

Massy drops to another year’s low on TTSE

Massy traded for the second day at 52 weeks’ low.

Trading on the Trinidad & Tobago Stock Exchange closed on Thursday with Massy Holdings ending at another 52 week’s low following another one on Wednesday.
Market activities ended with 11 securities trading against 12 on Wednesday, with 3 advancing, 2 declining and 6 remaining unchanged. At the close 769,673 units valued at $3,207,315 compared to 57,944 units valued at $1,115,191, changing hands on Wednesday.
The Composite Index fell 0.34 points to 1,229.79. The All T&T Index lost 0.66 points to end at 1,688.53, while the Cross Listed Index closed unchanged at 103.77.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading closed with 5 stocks ending with higher bids than the last selling prices and 4 with lower offers.
Stocks to Watch include, a number of companies that are exhibiting bullish tendencies and may be moving higher in the days ahead, the group includes, NCB Financial, Republic Holdings, and West Indian Tobacco.
Stocks closing with gains| Clico Investments closed with a gain of 14 cents and ended at $20.15, with 6,850 stock units changing hands, Trinidad & Tobago NGL gained 1 cent and settled at $29.50, after exchanging 9,275 shares and Trinidad Cement added 5 cents and concluded trading at $2.65, after exchanging 620,133 shares.
Stocks closing with losses| Massy Holdings closed with a loss of $1 to closed at a 52 weeks’ low of $44, after exchanging 2,300 shares and Point Lisas share fell 1 cent and ended at $3.63, with 1,400 stock units changing hands.
Stocks trading with no price change| Angostura Holdings ended market activity at $15.70, with 311 stock units changing hands, Guardian Holdings completed trading at $16.65, with an exchange of 1,000 units, JMMB Group concluded trading at $1.64, after exchanging 114,933 shares, Scotiabank closed trading with 12,756 units at $64.50 and Unilever Caribbean ended at $24, with 100 stock units changing hands.
Prices of securities trading for the day are those at which the last trade took place.

Junior Market down could slip further

Negative movement in the Junior Market continued on Wednesday with 20 securities changing hands versus 26 on Tuesday, with just 4 stocks rising, 8 declining and 8 remained unchanged leading the Junior Market Index to fall 23.46 points to close at 3,219.22.
IC bid-offer Indicator| At the end of trading, the Investor’s Choice bid-offer indicator reading flashed negative sentiments with 7 stocks ending with bids higher than their last selling prices, while 7 closed with lower offers.
The day’s activity ended with an exchange of 1,116,649 units valued at $4,642,267 compared to 1,035,040 units valued at $4,104,381 on Tuesday.
Trading ended with an average of 55,832 units for an average of $232,113 in contrast to 39,809 units for an average of $157,861 on Tuesday. The average volume and value for the month to date amounts to 136,271 units valued at $644,972 and previously 153,569 units valued at $733,759. October, ended with an average of 69,421 units valued at $347,455 for each security traded.
At the close of trading, AMG Packaging ended with a loss of 2 cents at $1.88, with 1,676 stock units changing hands, CAC 2000 finished market activity at $16, in exchanging 15,000 shares, Caribbean Cream dropped $1 to $5 and ended trading 30,000 shares, Derrimon Trading ended 20 cents higher at $2.80, with 1,526 shares changing hands, Elite Diagnostic closed 18 cents higher at $3.20, with the trading of 14,275 stock units. Eppley settled at $8, with 24,500 units changing hands, Everything Fresh ended trading of 100,000 shares, to close at $1.80, Express Catering traded 8,788 shares in closing at $8, FosRich Group traded 190,099 shares in rising 60 cents to $3.80, General Accident finished trading 1,797 shares with a loss of 25 cents and ending at $3.50. Indies Pharma ended trading of 134,987 shares at $3, Jetcon Corporation gained 10 cents to close at $3.85, in exchanging 343,605 stock units, KLE Group finished trading with a loss of 30 cents at $3.50, with 5,560 shares changing hands, Knutsford Express closed at $12, with 13,870 shares trading, Lasco Distributors ended with a loss of 4 cents at $3.95, with 76,656 shares changing hands. Lasco Financial concluded trading with a loss of 3 cents at $5.37, in exchanging 25,570 stock units, Lasco Manufacturing finished with a loss of 2 cents at $3.40, with 1,464 units changing hands, Main Event settled at $6, trading 13,118 shares, SSL Venture Capital traded 57,508 shares at $2 and Stationery and Office finished trading with a loss of 19 cents at $9.01, with 56,650 stock units.
Prices of securities trading for the day are those at which the last trade took place.

Profit jumps 71% at Eppley

Profit climbed 71 percent in the September quarter at Eppley this year, to reach $36 million from $21 million in 2017 period. For the nine months to September, profit surged a slower 56 percent to $80.7 million from $51.6 million in 2017.
Interest income rose 27 percent for the quarter, to $84.6 million, up from $66.7 million and rose 23 percent for the year to date, to $234 million compared to $191 million in 2017. Other operation income increased a strong 105 percent to $34 million from $16.7 million in the 2017 third quarter and is up 73 percent to $68.5 million for the nine months.
Net interest income grew to 47 percent of income versus 36 percent in 2017 in the quarter and 46 percent for the 2018 nine months period compared to 39 percent for 2017, the improvement resulted from cheaper funds acquired during the year as interest rates in the country fell sharply.
Administrative expenses rose 90 percent to $39 million in the quarter and increased 55 percent in the nine months period to $98 million.
Earnings per share came out at 19 cents for the quarter and 42 cents for the nine months and should end the fiscal year ending around 60 cents and for 2019 it should be in the region of 90 cents.
Gross cash flow brought in $75 million but changes in working capital and net loan inflows and the payment of $46 million, resulted in a modest decline in funds of $15 million for the nine months. At the end of September, shareholders’ equity stood at $740 million with borrowings at 2.27 billion. Loans receivables including lease and premium financing is $2,13 billion while investments in securities amounted to $363 million. Cash and bank balances the period at $384 million.
The stock traded at $8 on the Junior Market of the Jamaica Stock Exchange with a PE ratio of 13 times 2018 earnings. Net asset value is $3.85 with the stock selling at just over 2 times book value.

Nothing for Carib Cement stockholders

Carib Cement silos.

Jamaica’s Caribbean Cement Company slashed the cost formerly associated with leasing of Kiln 5 and Mill 5, from Trinidad Cement after acquiring direct ownership of the assets by $2 million per annum but shareholders are getting none of it the September quarterly results show.
Shareholders are unlikely to see any major benefit form the savings until 2019 when the plant upgrading costing US$45 million comes on stream and aided by a near 5 percent price increase effected in October to help offset cost increase.
For a number of years, some of the company’s shareholders have complained that the lease arrangement of the two items with the Trinidad parent was not in favour of the minority owners as it was costing too much and was not properly accounted for in past financial reports, thus suppressing the profit. With the termination of the lease and acquisition of assets it was expected that there would be a immediate noted impact on the results, that was not to be. The interim results to September, with the first period showing the full impact, indicate that shareholders are not benefitting from the $500 million cost reduction per quarter.
Data disclosed by Jamaica’s sole cement producer in their nine months interim report, show that excluding foreign exchange loss, there is a $500 million savings in the overall cost associated the acquisition of the two items formerly leased.
The equipment lease ended in April 2018 when both parties agreed to end the arrangement, leading the Jamaican company to purchase the assets. The interim figures show finance cost excluding foreign exchange loss rose of $227 million up sharply from just $11 million in 2017, in the quarter, resulting from funds borrowed to help finance the purchase of the equipment and $299 million versus $4 million year to date. Depreciation and amortisation cost rose to $342 million from $132 million in 2017 and for the nine months to $808 million from $400 million in 2017, with the increase mostly relating to the former leased equipment. The net effect is that the company enjoyed a savings of $500 million for the quarter or $2 billion per annum. None of these gains are so far flowing to the bottom-line for the benefit of shareholders.
Revenues grew 6.7 percent in the September quarter or $282 million but certain direct operating cost rose by $546 million with no indication that any attempt was made to recover the increased cost except for price increase in October. The effect is that profit before foreign exchange losses and taxation was only $148 million greater than in the prior year, when $846 million was reported.

Peter Donersloot – Managing Director

“The true story should be that the company’s performance illustrates the resilience of the its operations with the reporting of a profit even when taking a big foreign exchange loss, the company’s managing director, Peter Donkersloot, suggested in an interview with IC Going forward he said that, the upgrading of the plant will push the capacity to 1.2 million tonnes of cement allowing them to meet local demand and resume exports. “The upgrade should be completed and be in production around December but no later than January,” Donersloot stated. The immediate impact will be the elimination of imports that added to cost of sales and reduced profit margin, up to September”
Subsequent to the end of the quarter the price of cement was adjusted up by 4-4.5 percent Donkersloot confirmed. Information gleaned is that the increase took place for sales as of October 22 and is the first increase in 16 months.
The often talked about energy plant to be constructed to cut the huge energy bill was not an area the managing director was prepared to talk about, in light of negotiations currently in place.
As it stands, what appears to be a decision to defend their market share resulted in the company reporting much lower profit in the quarter as a result of a $464 million foreign exchange loss hitting the results for the September quarter, pulling the strong 44 percent increase in operating profit to $1.2 billion from $836 million, into lower net profit of only $305 million, versus $748 million generated for the prior year’s period.
Since the results, the stock that has been trading between $47 and $50 dropped to a recent low of $41.20.