Jamaica Public Service Company (JPS)
reported lower profit for 2016 after profit tax after profit before tax increased from US$30.83 million to $33 million. Taxes more than doubled to US$8.94 million cutting profit to US$24 from US$26.5 million in 2015.
While the Jamaican economy grew nearly 1.5 percent in 2016 JPS’ gross revenues went in the opposite direction, falling to US$713 million from US$759 million. The decline in revenues could well be attributable to an increasing switch to solar energy by many corporate clients which may continue for a while as the cost of installing solar declines.
Gross profit contracted to $284.7 million from $286.2 million. Operating expenses rose by $20 million to $220 million leaving operating profit at $64.4 million well off from $86 million in 2015. Net finance cost hit $39.8 million down from $42.58 million while the company garnered $10.37 million from other income compared to $2.45 million in 2015.
Equity grew to $395.4 million at the end of 2016 up from $366.9 million. The company borrowed $369 million at the end of the year. JPS reports their results in US dollars.
JPS has a number of preference shares listed on the Jamaica Stock Exchange but so far the ordinary are not listed.
Increased tax pushed JPS profit down
Strong JPS financial performance
Jamaica’s main power generator, Jamaica Public Service Company, delivered improved results for its shareholders for 2015. The company reported US$26.5 Million in profit and US$30.7 Million total Comprehensive income for the full year to December. The result was an improvement over the $23 Million and $7.5 Million recorded respectively in 2014.
The improvement was due to a combination of factors, including growth in energy sales, improved generation efficiency and lower than expected finance costs.
The Company earned operating revenues of US$760 million for the year, a decline of $263 million or 26 percent than in 2014, due primarily to the 46 percent decrease in fuel costs recovered from customers, offset by a 2 percent increase in energy sales. JPS states that the increased energy sales, 1.9 percent above the 2014, reversed a three year trend of declining sales. “The increase was attributed to warmer weather, lower fuel costs and increased consumer confidence. As a result, the non-fuel revenues were approximately $7M or 1.7 percent above budget.”
The company also stated that it recorded the best thermal plant fleet Heat Rate ever: which also better than the target set. Operating expenses of $200 million incurred in the current year compares to $191 million in 2014. Excluding depreciation and amortisation expenses, the increase flowed from $5 million increase in other operating expenses which moved from $137 million while depreciation and amortisation expenses increased to $58 million as opposed to $54 million in 2014.
Net finance costs decreased by $13 million or 23% from $55 million in 2014 to $42 million in 2015 mainly as a result of a reduction in net losses suffered on foreign currency transactions and balances. Cash inflows from operating activities improved from $106 million in 2014 to $119 million in 2015. The improved inflows from operating activities were offset by increases in the cash outflows from investing and financing activities. Cash outflows from financing activities increased marginally from $64 million in 2014 to $65 million in 2015. Cash outflows from financing activities increased from $36 million in 2014 to $57million in 2015. At the end the cash position saw net cash & cash equivalents decreasing from $8 million in 2014 to $6 million.
JPS has preference shares listed on the Jamaica Stock Exchange but no ordinary shares.
JPS costly power losses
Kelly Tomblin – CEO JPS
The cost to the wider society the loss in business opportunities and jobs lost due to higher operating cost, that makes some entities not as competitive as they ought, have not yet been quantified, but is likely to be far greater than the $27 million mentioned above. According to data from JPS, system losses increased by just over 1 percent last year, ending the year at 26.65 percent. That is huge, and is well over the 10 percent experts say it should be. JPS in a recent report to its shareholders said “Electricity theft resulted in a net penalty of US$18.4 million to JPS on the cost of fuel used in electricity generation.”
Faced with the massive theft of electricity, the company began curtailing the hours of service to certain communities where according to the company more than 70 percent of the electricity provided was being stolen. The move irritated the Office of Utilities Regulation and some politicians forcing the company to back off. Unfortunately, the issue of theft has been a longstanding problem which the government who have responsibility for keeping order in the society have failed to address, forgetting that it has wider implications for economic growth and development.
Lower rates to drive JPS profits
There has been much made about the OUR cutting the rate for Jamaica Public Service (JPS) and the likely effect on investment in the sector. Unfortunately, many who are critical of the reduction failed to make the point that when JPS was guaranteed a 16 percent rate of return, interest rates locally were well above present levels.
Secondly, just over 12 percent after tax is a good rate of return when one considers that international interest rate are so low and treasury bills rate locally, have been declining and is now under 7 per annum. One of the most telling factors is that JPS is by no means the most efficient company especially with its plants, and newer ones will reduce cost to operate, thus helping to improve their bottom line. Most telling now, is that the lower price of electricity occasioned by lower oil prices will drive up consumption thus helping to improve JPS profits. With the latest announcement of a cut in billing rates JPS must be quietly cheering and hoping that oil remains low for a very long time.
In its latest release the power company states that “the Fuel & IPP charge on bills will be reduced by 18%, moving from $19.350 per kWh in January to $15.760 per kWh on bills this month. This will contribute to an overall reduction of 11% on customers’ bills should their usage remain consistent.”
It is also important to note that the Fuel and IPP Rate in US terms for February is 13.608 cents, the lowest the rate has been in US denomination in almost six years. The Fuel and IPP charge makes up more than 60% of customers’ electricity bills, and changes from one month to the next, depending on how much JPS pays Petrojam for the oil used to produce electricity. The fuel rate that appears on bills each month is based on the cost of the fuel used to generate electricity in the previous month.”
“JPS encourages customers to continue their conservation efforts, despite the drop in the Fuel Charge on bills, as the total amount on bills is determined by how much electricity is used.”
Financial stocks pull JSE down
NCB stock fell back to $18.80 from the $19.99 it was pushed to on Thursday
Investors participated in a small number of securities on Friday, resulting in the prices of 6 rising and 6 declining as 17 securities changed hands and ended with 2,404,440 units, valued at $12,847,928 traded, in all market segments. At the close there was demand for more with bids failing to attract sellers at the closing bid prices.
IC bid-offer Indicator| At the close of the main and junior markets, the Investor’s Choice bid-offer indicator shows 8 stocks with bids higher than their last selling prices and 4 with offers that were lower.
Main Market| The JSE Market Index lost 702.66 points to 76,333.54, the JSE All Jamaican Composite index fell 785.62 points to close at 84,062.74 and the JSE combined index declined by 667.53 points to close at 78,323.69.
JMMB stock closed down to $6.50 on Friday but JSE had the price falling 54 cents in computing the index.
Firm| The stocks in the main market to close without a change in the last traded prices are, Scotia Group which ended with 147,987 units trading to close at $20.10, Desnoes & Geddes closing with 325,000 shares trading to close at $4.90 and Scotia Investments ended with 15,000 shares changing hands at $23.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Jamaica Broilers closing with 102,265 units trading as the price slipped 5 cents to $4, Jamaica Money Market Brokers finished with 514,668 shares trading lower by 1 cent to $6.50, National Commercial Bank closed with 7,200 shares changing hands to close lower by $1.19 at $18.80 and Pan Jamaican Investment finishing with 6,750 units, the price slipped $3.99 to $52.01.Preference| Jamaica Money Market Brokers 8.75% preference shares traded 27,000 units at $3 and Jamaica Public Service 9.5% preference shares traded 941 units at $1,006.10.
Trading picks up 12 stocks rise
Grace gained $1.34 to close at $57.95 on Friday
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator had 6 stocks with bids higher than their last selling prices and 7 stocks with offers that were lower, suggesting fluidity in price movements in the short term.
Main Market| The JSE Market Index gained 114.23 points to 71,665.90, the JSE All Jamaican Composite index rose 127.73 points to close at 78,843.73 and the JSE combined index was up by only 45.79 points, to close at 73,567.74 as the junior market index fell.
Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Carreras with 105,570 shares trading, rose 16 cents to $34.50, Caribbean Cement with 1,500 shares, closed 7 cents higher at $2.20, Gleaner had 3,900 shares changing hands, 5 cents greater at $1.10, Grace Kennedy put through 2,900 units with a gain of $1.34 to $57.95, Mayberry Investments with 2,453,103 shares, was up 4 cents at $1.40, Pan Jamaican Investment closed higher at $50 with 69,616 units, to gain 90 cents, Sagicor Real Estate Fund 7,800 shares traded 40 cents up to $7, Seprod had 50,000 units being active and added 5 cents to $11 and Supreme Ventures had only 2,000 shares changing hands, 12 cents higher at $1.72.
Firm| The stocks in the main market to close without a change in the last traded prices are, Cable & Wireless having 38,861 shares changing hands at 29 cents, Jamaica Money Market Brokers with 25,300 ordinary shares, closed at $7, Kingston Wharves with 450 shares, ended at $5.50, Proven Investments traded 24,460 ordinary shares and ended at 18 US cents and Scotia Group with 22,534 shares closed at $19.50.Declines| The last traded prices of stocks with losses at the close of the main market are, Desnoes & Geddes trading 5,570,641 shares at $4.70, after slipping 9 cents, National Commercial Bank saw trading in 45,159 shares as the price ended 19 cents down at $17.80 and Sagicor Group with 465,779 units, fell 5 cents to close at $9.50.
Preference| Jamaica Money Market Brokers 8.75% preference share traded 2,332,279 units 2 cents up to $3, the Jamaica Money Market Brokers 7.50% preference share traded 718,300 units at $2, Jamaica Public Service 9.5% preference share traded 200 units at $1,006.10 and Proven Investments 8% preference share traded 1,800 units at $5.
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8 stocks up 8 down on JSE
Thursday’s activity on the Jamaica Stock Exchange, resulted in the prices of 8 stocks rising and 8 declining as 23 securities changed hands, culminating in 4,981,371 units trading, valued at $38,684,054, in all market segments.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator had 5 stocks with bids higher than their last selling prices and 5 stocks with offers that were lower.
Main Market| The JSE Market Index lost 369.76 points to 72,183.30 and the JSE All Jamaican Composite index declined 413.45 points to close at 79,422.25.
Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Carreras with 29,815, gained 35 cents rise to $35, Desnoes & Geddes 503,359 shares changed hands, 1 cent higher at $4.80, Jamaica Money Market Brokers with 2,100 ordinary shares traded with a gain of 50 cents to $7.50, Proven Investments with 1,083,333 shares traded with a gain of 0.01 cent to 17.01 US cents and Sagicor Group put through 100,219 units, 2 cents higher to $9.57
Firm| The stocks in the main market to close without a change in the last traded prices are, Cable & Wireless had 31,764 shares changing hands 28 cents, Grace Kennedy had just 1,150 units trading at $59 and Radio Jamaica with 1000 shares ended at $1.15.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Jamaica Broilers with 22,400 shares closed 1 cents lower at $4, Sagicor Real Estate Fund traded 15,000 shares lost 4 cents to end at $6.60, Scotia Group with 10,700 units, gave up 2 cents to end at $19.03 and Scotia Investments with 21,772 shares, lost 60 cents to close at $21.40.
Preference| There was trading in 745,000 Jamaica Money Market Brokers 7.50% preference share at $2, Jamaica Public Service 9.5% preference share traded at 8138 units at $1,006.10 and was down $44.04 from the price it was listed at in 2012 and Proven Investments 8% preference share, traded 100 units at $5.
More stocks fall than rise but main indices up
In Thursday’s trading on the Jamaica Stock Exchange the prices of 4 stocks rose, 7 declined as 16 securities changed hands, resulting in 2,965,442 shares trading, valued at $16,295,528.
Main Market| The JSE Market Index gained 168.74 points to 70,533.56 and the JSE All Jamaican Composite index moved up 188.68 points, to close at 77,577.53.
Gains| Stocks recording gains at the end of trading in the main market are Berger Paints trading 2,955 shares to close with a 2 cents gain at $1.62, Carreras 7,535 shares closed 10 cents higher at $33.90, Desnoes & Geddes 21,750 units traded to close 5 cents higher, at $4.25, National Commercial Bank gained 5 cents to close at $18.20, with 900 units changing hands, Sagicor Group traded 1,137,827 shares in closing at $9.07 for a 2 cents gain and Scotia Group traded 11,881 units to close 9 cents up, at $18.60
Firm| Kingston Wharves with 511 units closing at $5.25 was the only stocks in the main market to close without a change in price.
Preference| Jamaica Money Market Brokers 7.50% preference share traded 439,700 units to close at $2,
Jamaica Money Market Brokers 8.75% preference share with 523,950 units closed at $3.01 and Jamaica Public Service 5% D preference share with 23,675 units closed at 35 cents.
Declines| The stocks that declined in the main market are Cable & Wireless that lost a cent with 6,758 units to close at 29 cents and Grace Kennedy with 25,000 shares as the price slipped $1 to close at $54.
Junior Market| The JSE Junior Market Index declined by 15.40 points to close at 670.67, only 4 stocks traded with none advancing and 3 declining.
Firm Trades| Only one stock in the junior market that traded, close at the same price as the day before with Lasco Financial Services trading 10,000 shares as the price closed at $1.
Declines| Junior market stocks declining at the end of trading are Caribbean Producers with 505,000 shares, declining by 5 cents to close at $2.50, Lasco Distributors with 129,000 shares changed hands for 5 cents higher at $1.20 and Lasco Manufacturing 119,000 shares, closed with a loss of 8 cents at $1.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 5 stocks with the bids higher than their last selling prices and 3 stocks with offers that were lower.
More stocks rise than fall on JSE
In Monday’s trading on the Jamaica Stock Exchange, the prices of 5 stocks rose and 4 declined. Only 18 securities changed hands, resulting in 4,848,981 shares trading, valued at $15,622,653.
Main Market| The JSE Market Index declined by 353.60 points, to 70,264.33 and the JSE All Jamaican Composite index moved down by 395.39 points, to close at 77,276.48.
Gains| Stocks recording gains at the end of trading in the main market are Gleaner with 11,000 units closed with a cent up, at $1.11 and Pan Jamaican Investment traded 56,790 shares to close with a gain of 48 cents, at $48.50.
Firm| There were only stocks in the main market to close without a change in price with shares closing, are Cable & Wireless traded 156,117 shares to close at 29 cents, Caribbean Cement with 500 traded closed at $2.20, Jamaica Broilers traded 154,589 shares but the price closed unchanged at $4.57, and Scotia Group with 68,506 shares closed at $18.40.
Preference| Jamaica Money Market Brokers 8.75% preference share 16,475 units to close at $3.03 and Proven Investments 8% preference share traded 2,700 units to close at $5.07.
Declines| The stocks that declined in the main market are Carreras had 80,000 units changing hands to close down 25 cents at $34.75, Jamaica Money Market Brokers with 628,736 shares, declined by 10 cents to close at $6.90, National Commercial Bank with 1,000 close at 50 cents lower at $17.50, Sagicor Group 8,172 close with a 10 cent loss at $8.99.
Junior Market| The JSE Junior Market Index declined by 17.39 points to close at 692.40 as 6 stocks traded with 3 advancing and none declining.
Gains| Stocks recording gains at the end of trading in the junior market are Consolidated Bakeries traded 558,953 shares to close with a gain of 10 cents to close at 80 cents, Lasco Distributors traded 1,000,000 units and gained 10 cents to end at $1.30 and Lasco Manufacturing had 25,000 units changing hands to close 10 cents higher at $1.10.
Firm Trades| The junior market stocks that traded to close at the same price as the day before, are Access Financial Services 10,759 units to close at $10, Blue Power with 27,000 units to close at $9.05, with Caribbean Cream traded 2042684 units at 70 cents each as investors responded well to the 79 percent jump in profits for the first quarter ended May.
Declines| No junior market stocks decline at the end of trading.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 5 stocks with the bids higher than their last selling prices and 2stocks with offers that were lower.
