Revenues at Radio Jamaica fell for the year to March 2021, by 7 percent to $5.2 billion, from $5.6 billion, but there ends the bad news for the group that comprises television, radio and newsprint as their main products. On the revenue front, the good news starts emerging with the final quarter climbing 11.6 percent to $1.4 billion from $1.25 billion in 2020.
Media house, RJR traded most shares on friday
Full year profit surged 351 percent over 2020 to hit $171 million and just 7 cents per share, from $38 million in 2020. The March quarter, which is usually one of the worse for the group, with mostly ends losses, generated $44 million profit after tax.
The profit for the fourth quarter in 2021 compares exceptionally well with a loss of $156 million in the final quarter of 2019 and a loss of $96 million in 2020, March quarter. The sharp turnaround is directly attributed to the cost surgery the group underwent last year.
The year’s performance comes against the backdrop of $366 million in what can be considered one off costs in a year when revenues fell 7 percent, redundancy payment amounting to $183 million and provisions for bad debt $158 million. In addition, included in operating cost is $164 million for web development, an item that appears to be more of a capital nature than an expense, but it has been reported as an expense for some years. Importantly, redundancy costs will not repeat, at least for the same workers but critically, it will result in an annual staff cost savings of a similar amount in the future. For the past year, those workers who were made redundant would have been employed for approximately half the year, so the reduction in wages in 2021 onwards would be around $90 million. In line with the above, salaries and wages fell $365 million to $1.5 billion for the 2021 fiscal year. Some of the reductions relate to a period when staff members were on reduced pay. Inventories expensed to direct production expenses during the year amounted to $213 million, well down on the $393 million for the Group in 2020.
Segment results show television revenues growing 7 percent for the year to $2.36 billion, with the March quarter surging an attractive 23 percent to $626 million. The segment had the worse period in the fiscal year with a 2.7 percent decline in revenues for the June quarter. Operating profit from this segment blasted off from $132 million to $479 million.
RJR shareholders at the 2019 AGM at the Jamaica Pegasus
Radio suffered just a 4 percent reduction in revenues, with most of that coming in the June quarter, with a fall of 20 percent and the segment delivered an operating profit of $95 million for the year from a small loss of $4 million in 2020. For the final quarter, revenues for radio were up one percent over 2020 to $184 million.
The print division took the brunt of the hit to revenues last year, with a fall of 40 percent in the June quarter, 20 percent in the September quarter and 19 percent in the December quarter. Revenues fell 19 percent to $2.3 billion for the year but enjoyed a six percent bounce in the March quarter, putting it ahead of the 2019 revenues, but ended 2021 with an operating loss of $267 million from a small loss of $14 million in 2020. The bulk of the redundancy of 106 workers came from the print division, with a redundancy cost of $157 million. The March quarter results mark a major about turn for that division, with increased revenues, but the segment results show an increased loss in 2021 of $64 million versus $28 million in 2020; this could be due to bad debt provisions that may have been made in the final quarter.
Cash inflows for the quarter were $600 million versus $403 million in 2020, but after working capital changes, inflows slipped to $540 million, after paying $176 million on the acquisition of property and receiving loan proceeds of $132 million resulted in cash on hand growing by $426 million.
The group ended with cash and equivalent of $725 million at the end of March, up from $282 million, while borrowings stood at $528 million, up from $425 million at the end of the 2020 fiscal year. Receivables climbed to $1.2 billion from $1 billion at the end of March 2020, but allowance for impairment grew from $288 million to $395 million.
Current assets stood at $2.1 billion and current liabilities at $1 billion, resulting in net current assets of $1.1 billion. Shareholders’ equity grew to $2.5 billion from $2.3 billion as of March 2020.
ICInsider.com projects a profit of just over $970 million or 40 cents per share for the 2022 fiscal year and 55 cents per share for 2023. The stock last traded at $1.67 on the Main Market of the Jamaica Stock Exchange on Friday and trades at a PE ratio of 4, well below the average of 16 currently for the Main Market. The stock is ICInsider.com BUY RATED.
