Carib Cement Q1 profit triples

After several years of underperformance, Jamaica’s sole cement producer – Caribbean Cement is reporting record profits of $1.53 billion, an increase of 216 percent from $483 million in 2020 from a 31 percent increase in revenues to $5.97 billion for the quarter ending March 2021, over the 2020 corresponding period. 
The strong quarterly performance follows an excellent December 2020 quarter when profit jumped sharply to $962 million from $310 million in 2019.
Direct production cost rose 15 percent from $2.7 billion in 2020 to $3.1 billion, as a result, gross profit jumped 54 percent to $2.88 billion from $1.88 billion in 2020, resulting in profit margin rising 48 percent from 27 percent in 2020.
Other operating expenses fell 10 percent from $651 million to $582 million in the quarter. Finance cost declined in the quarter, from $164 million to $162 million. Foreign exchange losses slipped to $209 million for the quarter from $281 million in the previous year’s corresponding period.
The company continues to enjoy a healthy cash flow and ended with $755 million in cash funds at the end of the quarter after pulling in $3.3 billion in gross cash inflows and after paying $953 million in corporate taxes and repaying $1.9 billion in connection with loans.
At the end of March, loans outstanding amount to $4.8 billion, while shareholders’ equity amounts to $13 billion up from $8.8 billion at the end of March 2020.
Current assets ended the period at $4.1 billion up from $3.1 billion at the end of March 2020. Trade receivables ended at $404 million from $450 million last year march while inventories stood at $2.7 billion up from $21 billion at the end of the 2020 first quarter. Current liabilities rounded out the quarter at $7.3 billion compared to $4.9 billion at the end of the 2020 first quarter.
Earnings per share came out at $1.79, up from 57 cents in 2020. IC Insider.com is forecasting around $8.50 per share for the year with the PE currently at 12.5 times 2021 earnings.
The stock last traded at $75 on the Main Market of the Jamaica Stock Exchange on Wednesday and is projected to get to $150 in the next twelve months.

Barita’s profit doubles

Fast out of the block, Barita Investments opens the earning season for the March quarter with a doubling of profits for the quarter and half year. Profit after tax rose from $509 million to $1.04 billion and from $1 billion in the half year ended March 2020 to $2.06 billion in 2021.
Revenues nearly doubled for the quarter to $2.05 billion from $1.13 billion in 2020 and from $2.26 billion last year to $4.05 billion in 2021. Fees and commission income surged from $182 million in the 2020 quarter to $898 million and foreign exchange gains jumped from just $19 million in 2020 March quarter to $650 million this year, while the half year’s figures saw a steep increase from just $106 million to $1.1 billion. Investment gains in the latest quarter fell to just $121 million compared to $599 million in 2020, while the half year saw a slight drop in 2021 to $791 million from $851 million.
Operating expenses rose 70 percent at a much slower pace than revenues to $794 million in the quarter from $468 million in 2020, for the half year cost increased 54 percent to $1.47 billion from $958 million to March 2020.
Earnings per share rose to 96 cents in the quarter from 62 cents in 2020 and from $1.24 last year to March to $1.90 in 2021.
Total assets are now $78.7 billion, up from $48.7 billion at the end of the year ago and from $70.7 billion at the end of September, last year and shareholders’ equity climbed from $14 4 billion in March 2020 to $28.7 billion in 2021. Pledged assets jumped from $21.5 billion in March 2020 to $47 billion in the latest quarter, while loans receivables increased from $1.1 billion to $7.3 billion.
The company’s shares trade on the Jamaica Stock Exchange and last traded at $86.01 at earnings for the full year of $4 the PE is 21.5.

JSE main Market at 12 months high

The Jamaica Stock Exchange hit the highest points on Monday Morning trading since it closed above the 442,906 points level on April 14, 2020. The Junior Market now trades at the highest level since January 31, last year with the index now at 3090.76, up from the previous high of 3,098.16 at the close of January 29 2020.

Cement production surges with big Q1 profit

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Three months after Caribbean Cement Company announced its 2020 record cement production of 940,000 metric tons results, approximately 78,000 per month, the company recently reports the production of more than 100,000 metric tonnes of cement in a month in March. It marks the highest monthly production in recent history, the company reported.
“The trend for this quarter is of a higher average than that of the past ten years and is in response to domestic market demand”, a release from the company stated.
In 2020, the company had sales of $20 billion, up 13 percent from $17.8 billion in 2019, with a profit of $3.2 billion, up from $1.9 billion. In the first quarter of 2020, revenues grew by two percent to $4.5 billion, but profit fell to $453 million from $1.1 billion in 2019. In the 2020 first quarter, there was a loss on foreign exchange of $282 million. The company reduced most of its foreign currency exposure. As such there should be minimal exchange losses in the 2021 first quarter.
The company reported sales of $5.77 billion in the September quarter sales were approximately 270,000 tons and in December 2020, quarter sales was around 310,000 resulting in revenues of $6.6 billion.
ICInsider.com estimate revenues to be slightly ahead of the December quarter and has upgraded projections of revenues to $26 billion for 2021 with a net profit of $7.2 billion for EPS of $8.50, up from $6.70 previously.
Cement production is one of many bright spots in the Jamaican economy in 2020 and the current year. The companies shares are listed on the Jamaica Stock Exchange and last traded at $73 with a PE of 8.6 times 2021 earnings and a projected stock price of $160 by early 2022.

Jamaica’s unemployment drops again

Jamaica’s unemployment rate has dropped from 10.7 percent in October last year to 8.9 percent in January this year, which is 1.5 percentage points higher than the rate in January 2020, data from the Statistical Institute of Jamaica shows.
According to the body charged with gather and reporting on Jamaica’s economic data, there were 1,194,800 employed persons at the time of the survey, 74,300 or 5.9 percent fewer persons compared to January 2020. “The largest decline in employment by occupation was among ‘Service Workers and Shop and Market Sales Workers’, while the industry with the largest decline in employment was ‘Accommodation and Food Service Activities,” Statin said.

Jamaica’s 2020 trade gap narrowed sharply

Jamaica spent US$1.7 billion less on imports in 2020 than in 2019 but still imported a staggering US$4.71 billion in goods during the year, at the same time, the country’s exports fell $427 million or 26.4 percent to $1.22 billion, a release by the Statistical Institute of Jamaica (STATIN) shows.

Oil drilling offshore

Mining exports fell by $288 million for the year, accounting for almost all of $293 million in the decline in traditional exports. Total Non-Traditional exports fell 9.3 percent or by $59 million to $568 million as the category Mineral Fuels etcetera fell by 26 percent or $77 million to $220 million from $297 million in 2019. This category involves mostly the sale of fuel to aircrafts and ships leaving Jamaica and exports of lubricants.
Interestingly, both imports and exports declined by 26.4 percent for the year as imports fell by 26.4 percent from US$6.4 billion in 2019. STATIN states that the decline in imports was largely due to lower imports of ‘Fuel and Lubricants’ and ‘Raw Materials and Intermediate Goods’, which fell by 48.8 percent and 17.1 percent, respectively.
“The decline in total exports was mainly influenced by a reduction in the export of Alumina which fell by 39.8 per cent and “Mineral Fuels” by 36.1 percent,” the release stated.

Consolidated Bakeries Miss Birdie Easter bun.

While the data shows some disappointing areas other than mining and Mineral Fuels, etcetera, there are a number of bright spots on the non-traditional front. Food exports climbed 12 or by $22 million to $207 million, with yams increasing by 24 percent and adding $7 million to end at $37 million. The category of Breads, Biscuits, Buns, Cakes etc., grew 13.8 percent to $25 million while sauces climbed a strong 24 percent to $30 million. Other Food Exports grew by 23 percent to $33 million and other domestic exports jumped 151 percent to $9 million.

Another acquisition for Proven

Proven Investments has entered into a definitive agreement with Knowledge First Foundation to purchase all the issued shares of Heritage Education Funds International Inc., for an undisclosed consideration, a release from Proven disclosed, making it this is the third acquisition the company has announced since January this year.
“Heritage Education Funds International specializes in administering and managing Education Savings Plans for its clients in the Bahamas, Bermuda, Jamaica, and the British Virgin Islands, and has enrolled over 50,000 children in its plan since its inception in 1983. It oversees approximately US$150 million in assets under management.
“The proposed acquisition is subject to regulatory authority and approvals in the various jurisdictions and is scheduled to be completed in the third quarter of 2021, subject to any extension by mutual agreement between the parties.
Proven sees this acquisition as complementary to its current financial services offerings, with current operations in three of the four main territories that Heritage Education Funds International Inc. also operates in. This acquisition is consistent with the Group’s overarching strategy to widen its presence in the wealth management space throughout the Caribbean, providing a solid platform for future growth,” stated Proven.
Reports reaching this publication indicates that Heritage has some challenges with some existing clients who are dissatisfied with returns they are getting on their funds that are well below levels that were pitched to them when they entered into contracts with them. All of that may well be factored into the price Proven will be paying to purchase the company.
Proven, that is listed on the Jamaica Stock Exchange and recently announced that they entered into an agreement with Fidelity Bank and Trust International to acquire all the shares of Fidelity Bank Cayman and in In January this year, they acquired 50.5 percent interest in Roberts Manufacturing Company, a Barbados based spice manufacturing company.

57% jump in T-bill rates

The latest Treasury bills issued by the Government of Jamaica saw a big jump in interest rates on two instruments, with the 91 day T-bill jumping by 57 percent compared to the rate in March, at the same time, the 182 days instrument rose by 36 percent.
The April auction attracted total bids of $3.6 billion for the $2.2 billion offered for three different maturity dates.
The T-bills for the 91 days ended with an average yield of just under 1.94 percent, up nearly 57 percent from 1.235 percent at the March 12 auction. The 182 days note jumped 36 percent to just under 2.071 percent and the 273 days note ended at 2.469 percent for the $800 million on offer.
The March auction had just two issues amounting to $1.4 billion, but it attracted $7.4 billion in bids while the February issues pulled in $6 billion for the $2.2 billion offered in three issues, resulting in the average yields were slightly below the latest issues in April. The rates for February ended at 1.52831 percent, 1.96323 percent and 2.41164 percent, respectively.

Tourism seems to bounce big in March

Jamaica’s tourism industry is bouncing back at a better pace than is generally known. Data on passenger movements through the country’s two major international airports show a fall of 51 percent compared to March 2020, but that is a major improvement over the 78 percent decline in the first two months this year.

Tourism is Jamaica’s largest earner of foreign exchange.

Admittedly, last years’ March numbers were negatively affected by the closure of the country’s borders on March 21, but the absolute numbers travelling in March is up substantially over both January and February this year, a sign of an improving market. With the country’s borders closed in the 2020 period, there were virtually no visitors entering the country until the end of May last year.
According to data from Aeroportuario del Pacifico, that manages many of Mexico’s airports and those in Montego Bay and Kingston, Jamaica, show the total number of passenger movements through the Kingston Airport falling 49.7 percent in March 2021 to 36,700 passenger movements, from 72,900 movements in March 2020. For the first three months of 2021, total passenger movements through Kingston’s Airport fell 67.4 percent, from 354,700 in 2020 to 115,500.
A better gauge of the rebound is the month over month change, with total passenger movements in March 2021 being up 22 percent over the 30,100 passenger movements in February this year. Kingston is not the main entrant or departure point for tourist visiting.
Montego Bay Airport saw a fall in the number of passenger movements of 50.5 percent in March 2021, from 261,500 in March 2020 to 129,400 in March this year. For the first three months of 2021, total passenger movements for the Montego Bay Airport fell 73 percent, from 1,133,900 in 2020 to just 304,600. The total number of passenger movements in March 2021 was, however, 71 percent more than the 75,600 handled in February 2021, an indication of a strong recovery trend.

High level of allocation for Fesco shares

Subscribers will get over 43 percent of the shares they applied for in the IPO of Future Energy Source, this will be one of the highest allocations in recent years for an IPO, but it may suggest a limited upside for the price initially.
Applicants in the General Public Pool receives 1,000 shares plus aroud 43.876 percent of the excess for they applied. The Brokers for the issue states that “multiple applications from the same JCSD account for each pool were combined and treated as one application for the purposes of allocation.
NCB Capital Markets receives its full allotment of 100 million shares. NCB Insurance Agency & Fund Managers Limited gets the full allotment of 16.245 million shares. The balance of shares in the Broker Reserve Pool of 58.755 million, which were not taken up, is transferred to the General Public Pool.
Key Partner Reserve Pool applicants will receive up to the first 250,000 shares plus approximately 80.195 percent of the balance applied for.
Applicants in the Employee Reserve Pool receives the first 50,000 shares plus approximately 72.32 percent of the rest.
Refunds for Applicants who did not receive allotment fully will commence April 14, 2021, NCB Capital Markets states.