National Four doubles profit but gains in Q3.
Trinidad’s National Flour Mills reported a 200 percent jump in profit for the six months to June of $20.57 million versus only $6.79 million in 2014, but for the nine months to September, growth slowed sharply, to an increase of 103 percent, to $29 million.
The sharp fall resulted from much slower growth in the September quarter, with profit after tax of $8.5 million, just up from $7.4 million in the similar 2014 quarter. The latest quarter reflects a continuation of the slow down in profits which occurred in the June quarter, with profit margin shrinking in that quarter. Earnings per share for the quarter ended at 25 cents versus 12 cents in 2014.
Revenue climbed 15 percent for six months, and is now up only 7 percent for the nine months to $359 million as revenues fell in the September quarter, to $103 million from $121 million for the September 2014 quarter. Cost rose a little faster in the September quarter, than it did for the June quarter, year over year, administrative cost jumped 32 percent to $30.3 million.
The company generated cash flow from operations of $44 million up from $28 million in 2014 and ended with cash and equivalent of $102 million up from $40 million at the end of September last year. Borrowings grew from $113 million to $137 million and payables were up from $27 million in September last year to $68 million, while equity stands at $223 million.
Helping the company, is the sharp fall in the price of wheat on the world market from a high of more than US$700 to just over US$500 to June but below US$500 per tonnes for quite a bit of the reporting period this year.National Flour manufactures and distributes flour is listed on the Trinidad and Tobago Stock Exchange (TTSE). Earnings for the full year to December should end around 35 cents per share. The stock trades at $1.97 around 5 times earnings, a low valuation. If the company can maintain the level of profit now being generated and improve on it in 2016, the stock stands to generate a good level of appreciation. Investing in the stock is not without risk. The cost of wheat makes up the bulk of direct cost, the ability for management to adjust prices if wheat prices change can be critical to the profitability. There are also political factors to consider as a large portion of the issued shares is under government ownership.
[…] hands at $6.50, National Commercial Bank had 25,000 shares changing hands to close at $2.40, National Flour closed with 3,400 shares changing hands at $1.95. Point Lisas closed with 5,000 shares trading to […]