The volume of stocks trading on the Jamaica Stock Exchange slipped further on Tuesday, leading to more stocks falling than rising and resulting in another fall in the market indices.
At the close of market activity, the prices of 9 securities rose, 12 declined, while 9 remained unchanged, with the All Jamaica Composite Index dropping another 3,094.77 points after falling more than 5,400 points on Monday to close at 389,172.61 and the JSE Index diving 2,819.68 points to close at 354,580.31.
Trading closed with 30 active securities in the main and US dollar markets, on Tuesday compared to 33 on Monday with 2,572,843 units valued at $35,216,901 changing hands compared with 1,665,733 units valued at over $37,959,691 being exchanged, on Monday.
Main market trading closed with Victoria Mutual Investments leading with 1,026,110 units, or 39.9 percent of the day’s volume and Wisynco Group with 1,006,114 units and 39.1 percent of volume traded.
IC bid-offer Indicator|At the end of trading, the Choice bid-offer indicator reading shows just 2 stocks ending with bids higher than the last selling prices and 7 closing with lower offers.
Trading resulted in an average of 95,290 units valued at over $1,304,330 in contrast to 57,439 shares valued at $1,308,955 on Monday. The average volume and value for the month to date amounts to 539,060 valued at $2,116,944, compared to 681,700 valued at $2,378,141. October closed, with an average of 290,851 shares, valued $5,213,901, for each security traded.
In the main market activity, Caribbean Cement gained $1 to close at $44 in closing trading of 2,602 shares, Grace Kennedy rose 50 cents and ended trading 17,355 shares to close at $57, JMMB Group gained $1 to end at $34, trading 27,735 shares, Kingston Wharves gained 95 cents to close at $75.95 with 4,281 stock units trading, Mayberry Investments lost $1.35 to settle at $10, in exchanging 20,365 units, Mayberry Jamaica Equities traded 17,367 units but fell 75 cents to close at $10.50, NCB Financial Group climbed $1.90 and ended trading 50,470 shares to close at $127, Proven Investments traded 15,000 shares in the Jamaica market and lost $3 to close at $27, Sagicor Group dropped $2.99 to settle at $39, with 29,976 shares, Scotia Group lost 79 cents to end at $51.20, trading 93,113 units, Sterling lost $1.50 to close at $20.50 trading a mere 140 units and Sygnus Investments traded 68,100 shares after falling $1 to end at $11.
Trading in the US dollar market ended with 55,380 units valued at $16,074. At the close of the market,JMMB Group 5.75% percent preference share completed trading of 3,880 and lost 1 cents to end at $2.05, Proven Investments traded 27,500 units at 20 US cents and Sygnus Credit Investments US dollar based ordinary share, traded 24,000 units at 11 US cents. The JSE USD Equities Index closed unchanged at 163.74.
Carib Cement hit by exchange loss
Sale revenues at Caribbean Cement rose 6.7 percent for the quarter, to $4.46 billion from $4.18 billion in 2017 and rose 7.9 percent for the year to date, to $13.2 billion from $12.25 billion in 2017.
A $464 million foreign exchange loss hit 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 $305 million than $748 million for the prior year’s period. For the nine months to September, profit fell 28 percent to $1.3 billion from $1.8 million in 2017.
Energy cost climbed by $233 million in the quarter and $342 million year to date but other operating cost declined, with the repurchase of the mill and kiln, previously leased from Trinidad Cement with only $213 million was incurred in the third quarter versus $1.1 million in 2017. For the nine months $1.57 million was incurred compared to $3.3 billion. On-the-other-hand finance cost excluding foreign exchange loss rose to $227 million up sharply from just $11 million in 2017 in the quarter 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. The net effect is that the company enjoyed a savings of $500 million per quarter or $2 billion per annum as a result of the buy of the lease, but virtually none of this, benefited shareholders.
Earnings per share came out at 39 cents for the quarter and $1.54 for the nine months and should end the fiscal year ending to around $3.50, as the company reverses the foreign exchange loss in the December quarter and picks up some gains, as well as increased revenues resulting from a price increase of just over 4 percent, effective on October 22.
But IC Insider.com is forecasting a jump in earnings for 2019 around $5.30 per shares, as the plant upgrades is completed and commissioned, allowing for the elimination of costly imports that negatively impacted cost in 2018 and will see them moving back into exports.
Gross cash flow brought in $849 million but growth in receivables, inventories, addition to fixed assets, loan repayment and increased payables resulted in negative total flows thus reducing the cash on hand to $468 million. For the nine months the operations brought in $2.6 billion but working capital needs and capital transactions saw cash funds reduced from $1.67 billion to $468 million.
The sharp changes in funds is due to the repurchase of equipment that was previously leased that drove fixed assets to $23 billion from $7.7 million in 2017 and borrowing to $12 billion.
Shareholders’ equity stood at $10.26 billion with borrowings at just $12 billion and net current assets ended the period was negative $1 billion.
The stock traded at $45.20 on the Jamaica Stock Exchange with a PE ratio of 13 times 2018 earnings and sits around the centre of the market valuation. the price could double in 2019. Net asset value is $12 with the stock selling at almost 4 times book value.
Going forward, the company results should be helped from the improvement in the Jamaican economy and growth that is likely to flow from the construction sector including buildings and roads and bridges as well as from increased exports. There is also focus on cost reduction with the high energy cost being the next centre of attention.
Carib Cement chops $2B from lease cost
Jamaica 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.
Data disclosed by Jamaica’s sole cement producer in their nine months interim report showed that excluding foreign exchange gains or loss that there was a $500 million savings in the overall cost associated with the two items formerly leased.
The equipment lease ended in April 2018 when both parties agreed to the ending of the arrangement leading the Jamaican company agreeing to purchase same. The interim figures show finance cost excluding foreign exchange loss rose to $227 million up sharply from just $11 million in 2017, in the quarter 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. The net effect is that the company enjoyed a savings of $500 million for the quarter or $2 billion per year.
A $464 million foreign exchange loss hit the results for the September quarter pulling the strong increase in operating profit of 44 percent to $1.2 billion from $836 million into lower net profit of $305 million than the $748 million generated for the prior year’s period. For the nine months to September, profit fell percent to $1.3 billion from $1.8 million in 2017.