Profit climbs 20% at Paramount

Reduced administrative, selling and distribution expenses overcame a fall in revenues for the Junior Market listed Paramount Trading, for the fiscal year ending May 2021, to deliver a 20 percent rise in after tax profit to $64 million from $53 million in 2020 after profit surged more than nine times in the final quarter versus the similar period in 2020.

Paramount Trading had expanded into Chlorine and bleach processing.

In the final quarter, revenues rose 15 percent to $421 million from $366 million in 2020 and netted a profit of $36 million versus just $4 million in 2020. Sales revenue slipped 5 percent for the year to $1.44 billion, from $1.52 billion. Other income slipped from $25 million to $23 million, but foreign exchange gains contributed $19 million in 2021 versus $10 million in 2020.
Improvement in profit margin in the year saw margins rise from 30.9 percent in 2020 to 31.6 percent in 2021, but gross profit slipped 3 percent to $454 million, from $468 million in 2020.
Administrative expenses fell 32 percent to $68 million in the quarter, up from $100 million in 2020, and slipped 3 percent for the year, to $355 million from $367 million, a fall of $27 million in staff costs accounted for the bulk of the decline as salaries and wages fell from $179 million to $152 million as the average number of workers employed fell from 91 to 70. Distribution and sales expenses dipped from $19 million to $11 million. Finance cost inched higher from $48 million to $49 million in 2021.
The operations delivered gross cash flow of $121 million, but after changes in working capital, net cash flow from operations ended at $135 million. The company increased fixed assets by $9 million, had a net $15 million repayment of loans and paid $62 million in dividends, ended with increased funds at the end of the year of $49 million, pushing cash and investments to $261 million at the end of the fiscal year.

Paramount lubricant factory.

At the end of May, net current assets stood at $472 million. Current assets ended the period at $836 million inclusive of trade and other receivables of $323 million, cash and bank balances of $91 million. Current liabilities closed the year with $364 million. Non-current Investments being held for more than a year stood at $170 million. Shareholders’ equity ended at $796 million with long term borrowings at $473 million, down from $492 million in 2020 and short term loans amounted to $47 million versus $43 million in 2020.
Earnings per share amount to 4.1 cents for the year. forecasts 10 cents per share for the fiscal year ending May 2022 with a PE of 12.5 at the last traded stock price at $1.25 on the Junior Market of the Jamaica Stock Exchange. Net asset value is 52 cents per share, with the stock selling at 2.5 net book value.
The Company’s principal activity is the importation and distribution of chemicals, lubricants and other related products, provision of haulage services and blends lubricants.

Profit up 21% at Lasco Distributors

Lasco Distributors reported full-year results to March, with revenues rising 7.5 percent to $19.5 billion and profit increasing 21.4 percent to $726 million. The year’s performance reflects a big recovery after profit fell 30 percent in the first quarter to June last year, and 10 percent to the end of the third quarter.
The company enjoyed an 8.24 percent rise in revenues for the March quarter to $5.2 billion, with profit after tax for the quarter at $183 million, up 961 percent from just $17 million in 2019. The quarter suffered from a fall in gross profit margin to 18.4 percent versus 19.2 percent in 2019. Gross profit was 19.4 percent for the fiscal year versus 19.6 percent in 2019.
Other income in the fourth quarter climbed to $60 million, a turnaround from a loss of $37 million in the March quarter in 2019, but was nearly flat at $130 million for the year to March.
The increase in cost for the year was kept close to the growth in revenues, with Administrative expenses rising 8 percent to $2.37 billion while selling and promotion expenses fell 9 percent to $703 million for the year.
Segment results show revenues rising 3.6 percent for the Consumer division for the fiscal year to $15.7 billion while the Pharmaceutical division jumped 27.7 percent to $3.8 billion. Segment profit jumped 36.5 percent for the Consumer division to $557 million but the Pharmaceutical division dropped by 18.6 percent to $154 million even as revenues rose strongly.
Earnings per share ended at 21.27 cents and IC projects 38 cents per share for the 2021 fiscal year, with the stock trading at a PE ratio at 7.7 at the last traded price of $2.91, well below its sister company, Lasco Manufacturing.
Cash flows from operating resulted in the generation of $1 billion before working capital changes. Current assets stood at $6.9 billion, including Cash and cash equivalents of $1.47 billion at the end of March with current liabilities closing the year at $3.38 billion. Shareholders’ equity ended the year at $5.7 billion, with borrowed funds being just $116 million.
The company paid a dividend amounting to $151 million last year, with profit rising, a large pool of cash and virtually no borrowed debt, there is room for a big increase in future dividend payments that could make the stock an attractive dividend payer.