Paramount Trading is expanding its operations by offering chlorine and bleach products for contract manufacturing and through a joint venture with Allegheny Petroleum into lubricants.
“The Company recently completed construction of the infrastructure required for a new chlorine and bleach plant at its 6 East Bell Road, Kingston, which will be outfitted with state of the art equipment and advanced technology. The Company plans to commence operation of the plant in February 2018,” the release from the company states.
The Company also advises that it entered into an Asset Sale Agreement to acquire the bleach plant equipment and other assets from Seprod, for its new chlorine and bleach operations. This acquisition is in line with the Company’s goals to continuously strengthen its presence as a manufacturer in the chemicals market, and will complement the Company’s existing offerings. Paramount, Chief executive Hugh Graham said is the largest importer of chlorine into the island and that is also exports the product to the Eastern Caribbean.
Currently chlorine is imported in 150 pound containers, with the new facility chlorine will be imported in 2 tons containers which will be used to fill smaller 150 pounds containers, the by-product flowing from the process is bleach, Hugh Graham advised IC Insider.com. The net effect will be improved margins and lower cost. The deal with Seprod will come into effect in February after Seprod exhausts their inventories. This will mean lower cost for Seprod as Paramount packages bleach for Seprod.
The new operation is expected to boost profit at Paramount Trading that enjoyed a 126 percent turn-around in profit for the first quarter to August this year to $34 million from a 31 percent increase in revenues to $331 million. “Yes Alpart was one of our customers in the past when the plant was operating and they have returned now that they have reopened and was a major part of the jump in sales” in the recently concluded quarter, Graham confirmed.
The construction of the blending plant and laboratory, in conjunction with Alllegheny Petroleum is will be completed within a few weeks and is expected to be up and running in early 2018 Graham advised.
Based on discussions we are having the US$5 million that Graham advised was likely two years ago is likely be higher he indicated.
The stock jumped on Monday to $3.59 on the Junior Market of the Jamaica Stock Exchange.
Chlorine to boost Paramount’s margin
Paramount adds chlorine & bleach
Paramount Trading expanding into Chlorine and bleach processing.
Paramount Trading is expanding its operations by offering chlorine and bleach products for contract manufacturing, the company reported.
“The Company recently completed construction of the infrastructure required for a new chlorine and bleach plant at its 6 East Bell Road, Kingston 11 location, which will be outfitted with state of the art equipment and advanced technology.
The Company plans to commence operation of the plant in February 2018,” the release from the company states.
The Company also advises that on 26 October 2017 it entered into an Asset Sale Agreement to acquire bleach plant equipment and other assets from Seprod, for its new chlorine and bleach operations. This acquisition is in line with the Company’s goals to continuously strengthen its presence as a manufacturer in the chemicals market, and will complement the Company’s existing offerings.
Paramount Trading, enjoyed a big turn-around in profit for the first quarter to August this year, with an increase of 126 percent, to $34 million from a 31 percent increase in revenues to $331 million.
The directors’ report that accompanied the August quarterly results stated that they have “an optimistic outlook for the rest of the year and is very excited by the opportunities that will be realized. The construction of the blending plant and laboratory, in conjunction with Alllegheny Petroleum is slated to be complete during the next quarter.”
The stock currently trades at a PE ratio of 15 with the price at $3 on the Junior Market is in against the line with the market. What is true, is the nimbleness of management to identify new income generated opportunities that makes staying close to the stock potentially profitable.
Big jump in Paramount profit
Paramount new designed offices.
Junior Market listed Paramount Trading, enjoyed a big turn-around in profit for the first quarter to August this year, with an increase of 126 percent, to $34 million from a 31 percent increase in revenues to $331 million.
Importantly, Paramount incurred exceptional expenses in the first quarter, last year, as the company celebrated its 25 anniversary, IC Insider.com estimates the cost to be around $20 million, excluding this one off cost, profit would have been flat, in both periods.
Administrative and other expenses jumped from $44 million to $62.7 million, but selling and marketing cost dropped from $24 million to $2.8 million. Direct cost rose 35 percent, reducing gross profit margin with gross profit rising slower than the increase in revenues, at 23 percent to reach $101 million.
Earnings per share amounts to 2.2 cents. IC Insider.com places full year’s earnings at 19 cents and for the 2019 fiscal year to May 30 cents with the coming on stream of the joint venture lubricant plant.
The directors’ report stated that they have “an optimistic outlook for the rest of the year and is very excited by the opportunities that will be realized. The construction of the blending plant and laboratory, in conjunction with Alllegheny Petroleum is slated to be complete during the next quarter.”
The balance sheet shows net current assets of US$463 million, including inventories of $338 million, receivables of $283 million and cash funds and investments at $97 million. Borrowings are at $55 million up from only $16 million in August 2016.
The stock currently trades at a PE ratio of 15 with the price at $2.90 on the Junior Market against the market average of 14 and seems to be line with the market. What is true, is the nimbleness of management to identify new income generated opportunities that makes staying close to the stock potentially profitable.
