Desnoes and Geddes (DG) is undertaking lots of changes in it’s operation, that should help reduce cost and push up the bottom-line. Reduction in energy, partial switch from imported malt to the use of locally grown cassava, upgrading of the brewery to reduce operational cost and the eyeing of new markets, are all some of the things the brewing company is doing, that should transform its financial fortunes.
IC Insider’s forecast for the current year, is for profits to hit 90 cents per share and $1.20, the following year.
The directors have bought into the prospects of increased fortunes down the road for the company. Accordingly, D&G advised the Jamaica Stock Exchange that a Director purchased 2,270,000 of the company’s shares on October 9, 2014, on October 10, a director purchased 41,000 shares and on October 8 and 9, a director purchased a total of 251,147 shares.
Prior to these purchases directors also purchased 857,650 shares in September. On June 13, there was a sizeable purchase of 1,971,000 shares by a Director, with smaller amounts being bought between then and the September purchases.
More directors’ buying of D&G shares
Jamaican$ fairly stable on Wednesday
The volume of foreign exchange purchased by dealers on Wednesday, was just US$1.4 million less than on Tuesday, but selling was well down. The Jamaican dollar loss value slightly, against the US dollar and the British Pound, but gained against the Canadian dollar, in Wednesday’s forex trading.
Authorized dealers purchased the equivalent of US$35,555,039 versus US$36,918,551, on Tuesday. The equivalent of US$31,228,226 was sold, compared with US$42,227,009 on Tuesday.
In US dollar trading, dealers bought US$29,154,363 compared to US$34,350,001 on Tuesday. The buying rate for the US dollar slipped 8 cents to $112.16 and US$27,180,996 was sold versus US$35,584,175 on Tuesday, the selling rate rose 3 cents to $112.62. The Canadian dollar buying rate, rose 41 cents to $98.46 with dealers buying C$1,729,970 and selling C$1,095,703, at an average selling rate that dropped $1.72, to $99.67. The rate for buying the British Pound climbed $1.54 to $178.70, for the purchase of £2,202,473, while £1,074,042 was sold, at $179.93, up 6 cents. Other currencies bought, amounted to the equivalent of US$1,372,867, while selling was for the equivalent of US$1,361,555.
Highs & Lows| The highest buying rate for the US dollar, closed $1.21 higher, at $113.95, the lowest buying, the highest and the lowest selling rates, were unchanged at $91.85, $117.70 and $91.85 respectively. The highest buying rate for the Canadian dollar fell 2 cents to $100.28, the lowest buying rate declined 25 cents to $79.51 and highest selling rate rose $1.17 to $104. The lowest selling rate fell $1 to $95.10. The highest buying rate for the British Pound, fell 67 cents to $180.33, the lowest buying, was up $1.94 to $146.53, the highest selling rate fell $3.17 to $183.22 and the lowest selling rate dropped $1.20 to $173.
Jamaica’s inflation jumps 2.1%
Jamaica’s inflation rate for September jumped 2.1 percent, over August 2014. The sharp upward movement was impacted by 4 percent increase in the category Transport which recorded the highest movement, mainly as a result of an increase in the cost of bus fares in the Greater Kingston Metropolitan Area.
A 3.9 percent increase for Education, due to a rise in the cost of tuition fees, at the beginning of the new school year, was another main contributor to the hike. Food and Non-Alcoholic Beverages recorded an upward movement of 2.9 percent. This was mainly attributable to the lingering impact of drought conditions island-wide, which resulted in a shortage in supply of some agricultural produce and consequently higher prices, the statistical Institute of Jamaica said in a release accompany the data.
Inflation for the year to September is now at 7.1 percent. Going forward, the fall in the price of oil to US$80 barrel, revaluation of the Jamaican dollar and improved rain fall that should result in increased farms produce, should help to ease the inflation rate, in the months ahead.
Stocks gaining edge out decliners on JSE
Wednesday’s activity on day on the Jamaica Stock Exchange, resulted in the prices of 4 stocks rising and 3 declining as 16 securities changed hands, culminating in 5,387,514 units trading, valued at $30,063,697, 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 7 stocks with bids higher than their last selling prices and 6 stocks with offers that were lower.
Main Market| The JSE Market Index gained 417.93 points to 72,553.06 and the JSE All Jamaican Composite index climbed 467.31 points to close at 79,835.70.
Gains| Stocks gaining with last traded prices, at the end of trading in the main market are, Jamaica Broilers inched up a cent with 2,000 shares to $4.01, National Commercial Bank with 60,658 shares trading, put on 20 cents to $18 and Scotia Investments with only 1,050 shares changing hands, gained of 25 cents to $22.
Firm| The stocks in the main market to close without a change in the last traded prices are, Berger Paints with 257,920 units closed at $1.60, Carreras had 16,420 share being traded to close at $34.65, Gleaner enjoyed pick up in trading with 1,094,096 shares at $1.05, Jamaica Money Market Brokers with 4,041 ordinary shares closed at $7, Sagicor Group had 19,615 shares changing hands at $9.55 and Scotia Group put through 1,280,705 shares to close at $19.05.
Declines| Cable & Wireless with 1,872,639 shares is the only stock to end with a decline, down a cent at 28 cents.
Preference| Jamaica Money Market Brokers 7.50% preference share traded 781 units at $2 and the 8.75% preference share traded 9,859 units with a cent off at $2.99.
4 securities trade but bidding improves
The Junior Market closed trading with 767,730 units valued at $1,243,917 and Blue Power hitting a 52 weeks’ low. Tthe JSE Junior Market Index fell 2.86 points to close at 663.54 as only 4 securities traded with 1 advancing and 1 declining.
At the close of the market there was 6 stocks with the bid higher than the last selling price and 3 stocks with offers that were lower. The junior market continues to exhibit weakness with 9 stocks closing no bids to buy against 5 that had no stocks being offered for sale.
Medical Disposables with 51,500 units gained 2 cents to end at $1.90, Blue Power dropped $1.05 while there was dealing in 4,070 shares to end at $8, new 52 weeks’ low. Eppley 9.5% preference share closed with 75,130 units changing hands at $6.10 and Lasco Manufacturing ended at $1.04 while 637,030 units were active.
Six all in Wednesday’s TTSE trading
Trading on the Trinidad Stock Exchange resulted in 14 securities changing hands of which 6 advanced, 6 declined and 2 traded firm. On Tuesday only 1 stock rose to 6 declining ones. Overall market activity led to dealing in 495,472 units, valued at $8,933,884.
At the close of the market, the Composite Index lost 0.25 rose points to close at 1,141.71, the All T&T Index fell by 0.18 points to close at 1,969.54 and the Cross Listed Index declined 0.05 points to end at 41.09.
Gains| Stocks increasing in price at the close are, Ansa Merchant Bank closed at $39.40 by gaining a cent with 1,000 shares changing hands, to close at a new 52 weeks’ high, Berger Paints traded 100 shares to close with a gain of 4 cents to end at $3.65, for a new 52 weeks’ high, First Citizens Bank gained 4 cents to end the day at $36.65, Massy Holdings closed with 23,286 units trading at $68.60 for a value of $1,596,488, in gaining 8 cents, Sagicor Financial Corporation had 1,000 shares being active to close at $6.25, an increase of 5 cents and Trinidad Cement with 36,385 shares traded for $67,676 put on a cent to end at $1.85.
Declines| The stocks declining at the end of trading are, Angostura Holdings added 29,087 shares valued at $363,661 shedding just 5 cents to $12.50. Guardian Media closed at $19.75 after dropping a cent with 200 shares traded, National Flour Mills with 41,386 shares changing hands for a value of $48,835 lost 2 cents and ended at $1.18, National Enterprises lost 2 cents in trading 1,000 units at $17.60, Point Lisas Industrial Port Development Corporation traded 3,000 shares at $4 while losing a cent, Scotia Investments contributed 32,958 shares with a value of $47,789 and lost 5 cents to close at $1.45
Firm Trades| Stocks closing with prices unchanged at the end of trading are, Clico Investment Fund with 294,074 shares valued at $6,484,332 remained at $22.05 and National Commercial Bank with 26,000 units closed at $1.
IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 1 stock with the bid higher than the last selling price and 3 stocks with offers that were lower.
Ethanol hurts profit but US to boost it
Jamaica Broilers’ ethanol plant
The results for the first quarter to August, also suffered from increased taxation of $6 million and finance cost of $21 million, resulting in profit after tax declining moderately to $111 million versus $128 million last year. After factoring amounts due to shareholders in subsidiaries, the decline in profits for the group widened, with profit of $114 million, down from $140 million in 2013. Ethanol was not the only area that delivered losses. The category Other operations, saw a negative turn-around from a profit of $39 million in 2013 on revenues of $310 million the division made a loss of $21 million on revenues to third parties of $373 million to August.
The US operations was the crown jewel for the quarter with much improved numbers. Revenues in the division from third parties jumped from $805 million to $1.58 billion and contributed $287 million in segment profit compared with $76 million in 2013 and profit of $333 million for the 2014 fiscal year. The change was substantially due to the acquisition in 2013 of the poultry operations in the USA.
The Best Dressed foods division contributed revenues of $3.82 billion up from $3.5 billion in 2013 and segment profit of $235 million in 2014 versus $234 million in 2013 and the HIPRO-ACE division’s revenue was $2.1 billion down from $2.16 billion in 2013 with profit of $157 million for the 2014 period compared with $149 million in 2013.
The company’s management reported that they are “ responding to approaches from a number of parties who have expressed interest in entering new fuel processing contracts.” With the price of oil at $81 per barrel and prediction that it may go lower, the question to be asked is will there be short term viability of this operation?
Cash down borrowings up| Broilers saw a big increase in inventories over the August 2014 level a as well as for the April year end rising from $3.5 billion a year ago and $3.7 as of April to $4.8 billion for a billion dollar increase. Cash and equivalent dropped from $1.42 billion in 2013 to just under $1.2 billion, amounts tied up in receivables was slightly down to $2.7 billion and borrowings climbed to $6.7 billion from $5.3 billion in 2013.
For the year to April the ethanol division made a loss of $66 million and the Other operation, reported a profit of $452 million having made a profit of $340 million in the last period of the fiscal year. Some of the inputs into chicken processing have declined on the world market and therefore could lead to increased profit margins that along with what should be a substantially, increased profit from the US operations, should see profits for the current year rising well above the 80 cents per share or $957 million made in 2014.
Forex flows improved on Tuesday
The volume of foreign exchange trading in market on Tuesday climbed above the levels on Monday, with total inflows of foreign currency falling short of the amount sold. The Jamaican dollar gained slightly against the US dollar and the British Pound, but slipped against the Canadian dollar, in Tuesday’s forex trading.
Authorized dealers purchased the equivalent of US$36,918,551 versus US$28,048,552 on Monday. The equivalent of US$42,227,009 was sold, compared with US$27,425,753 on Monday.
In US dollar trading, dealers bought US$34,350,001 compared to US$21,894,747 on Monday. The buying rate for the US dollar was up 24 cents to $112.24 and US$35,584,175 was sold versus US$24,610,116 on Monday, the selling rate fell 6 cents at $112.59. The Canadian dollar buying rate, rose 34 cents to $98.05 with dealers buying C$955,435 and selling C$5,456,274, at an average selling rate that climbed 59 cents, to $101.39. The rate for buying the British Pound is declined $2.12 to $177.16, for the purchase of £1,016,454, while £861,905 was sold, at $179.87, down 67 cents. Other currencies bought, amounted to the equivalent of US$129,403, while selling was for the equivalent of US$352,422.
Highs & Lows| The highest buying rate for the US dollar, closed 26 cents lower, at $112.74, the lowest buying, the highest and the lowest selling rates, were unchanged at $91.85, $117.70 and $91.85 respectively. The highest buying rate for the Canadian dollar rose 10 cents to $100.30, the lowest buying and lowest selling rates remained unchanged at $79.76 and $96.10 respectively. The highest selling rate fell 64 cents to $102.83. The highest buying rate for the British Pound, rose 30 cents to $181, the lowest buying, the highest selling and the lowest selling rates were unchanged at $144.59, $186.39 and $174.20 respectively.
Moderate price changes on JSE stocks
Tuesday’s activity on day on the Jamaica Stock Exchange, resulted in the prices of 3 stocks rising and 4 declining as 22 securities changed hands, culminating in 755,690 units trading, valued at just $5,210,508, 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 4 stocks with bids higher than their last selling prices and 8 stocks with offers that were lower.
Main Market| The JSE Market Index lost 76.73 points to 72,135.13 and the JSE All Jamaican Composite index fell 85.80 points to close at 79,368.39.
Gains| Stocks gaining and last traded prices, at the end of trading in the main market are, Caribbean Cement with 500 shares, closed at a cent higher at $2.12, Mayberry Investments traded 16,900 units, to gain 5 cents to $1.55 and Scotia Group with only 168 units ended with a cent gain at $19.05.
Firm| The stocks in the main market to close without a change in the last traded prices are, Cable & Wireless with 10,000 units to close at 29 cents, Carreras closed at $34.65 with 5,210 shares trading, Desnoes & Geddes with 650 shares closed at $4.79, Grace Kennedy with 2,685 shares ended at $59, Jamaica Broilers 13,226 units traded at $4, Kingston Properties closed at $3.85 with 10,000 shares, Kingston Wharves had only 230 shares changing hands to end at $6.50, National Commercial Bank 52,881 shares, closed at $17.80, Sagicor Group with 10,170 shares closed at $9.55, Sagicor Real Estate Fund traded 8,900 shares at $7 and Supreme Ventures closed at $1.80 with 18,077 shares changing hands.
Declines| The last traded prices of stocks with losses at the end of trading in the main market are, Jamaica Money Market Brokers with 5,730 ordinary shares, lost a cent to end at $7 and Proven Investments traded 108,000 units at 0.50 cent less to 17 US cents.
Preference| Jamaica Money Market Brokers 8.75% preference share traded 194,415 units at $3 and lost 2 cents and Proven Investments 8% preference share traded 144,893 units at $5.
4 stocks trade on junior market
The Junior Market closed trading with only moderate interest and only 153,055 units valued at $196,918 changed hands. The JSE Junior Market Index increased 2.07 points to close at 666.40 as only 4 securities traded with 1 advancing and 1 declining.
At the close of the market there were 3 stocks with bids higher than the last selling price and 5 stocks with offers that were lower. The junior market continues to exhibit weakness with 9 stocks closing with no bids to buy, against 5 that had no stocks being offered for sale.
Lasco Manufacturing with 29,802 units, closed 2 cents higher at $1.04, Paramount Trading had 18,511 units trading, falling 2 cents to $2.50, Lasco Distributors traded 100,000 shares at $1.15 and Lasco Financial traded only 4,742 units at $1.
