RJR Q1 profit hits the roof

We boldly predicted that profit at Jamaica’s leading media house – Radio Jamaica, would exceed the full 2021 fiscal years’ earnings of $171 million and stun the market with the full year’s profit on the way to just under $1 billion. We messed up but we were darn close, with the first quarter numbers, but now expect full year’s results to beat the original forecast and end up over $1 billion. 
We projected revenues of $1.465 billion and they delivered $1.449 billion in the quarter. Our forecast for TV revenues was $626.344 million, they reported $639.377. Radio revenues came in at $199.605, somewhat higher than ICInsider.com’s projection of $184.05 and the print division delivered $610,217 million versus ICI’s forecast of $635,697. Other income amounts to $29 million versus IC forecast of $19 million.
RJR added approximately $70 million in provision for bad debt that to drive up administrative expenses above the recent trend thus producing a profit to $110 million in the quarter, a level never before done by them in the quarter. In achieving this performance, operating revenues surged 34 percent to $1.42 billion from $1.06 billion in 2020 and beating 2019 June quarter, with revenues of $1.36 billion.
Profit margin in the quarter rose to 65 percent from 64 percent in the 2020 quarter as direct input cost climbed 28 percent to $494 compared to $385 million in 2020 for the year’s quarter. The effect, operating profit rose 37 percent to $926 million from $675 million.
Sales expenses climbed by 6.5 percent to $243 million from $228 million in 2020. Administrative expenses rose 25 percent to $362 million from $290 million. Other operating expenses rose 14.5 percent and ended at $190 million from $166 million in 2020. Finance cost increased to $12 million from $11 million in 2020. Corporation taxes amount to $37 million and just $284,000 in 20.20

TVJ one of RJR’s subsidaries

The chief Executive officer Gary Allen and Chairman Joseph Matalon, in their report, accompanying the quarterly attribute the improved results to “cost cutting and improved income generation with “increased advertising revenues across all divisions, the continued collaboration with the Ministry of Education and the staging of ISSA/GraceKennedy boys and girls championship”.
Gross cash flow brought in $227 million but growth in receivables, inventories and increased payables resulted in an additional increase of funding of $120 million, addition to fixed assets and loan payment used up funds and created an overall net outflow of $119 million thus reducing the opening cash balance of $725 million to reflect the cash on hand at the end of the quarter. At the end of the quarter, Current assets ended at $2.34 billion including cash of $606 million and receivables of $137 billion, Payables amount to $1.29 billion and net current assets at $1.05 billion. Shareholders’ equity stands at $2.6 billion with borrowings at just $399 million.
Earnings per share came out at 4.5 cents. ICInsider.com forecasts earnings of 45 cents per share for the current year and 80 cents per share for 2023. The stock traded at $2.15 on the Main Market of the Jamaica Stock Exchange on Thursday with a PE ratio of 5 times, current earnings well below the average of 16.3 currently for the Main Market. The stock remains ICInsider.com BUY RATED.

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