January 16, 2024

Paramount Trading (Jamaica) Limited (PTL) for the six months ended November 30, 2023, reported a 28% decrease in revenue totalling $865.49 million compared to $1.20 billion in the corresponding period last year. Revenue for the second quarter had a 27% decrease to close at $439.44 million compared to $600.99 million for the comparable quarter of 2022. Management noted that, “the reduction was primarily observed in the Food Grade and SIKA-Construction segments and resulted from a one-off supply challenge and the expiration of a large building project, respectively. The Technical Grade segment, which accounted for 52% of total revenue, performed 1% above prior year. The Lubricants segment also performed well with a 10% growth in revenue.”

Direct expenses amounted to $536.31 million (2022: $788.19 million), this represents a decrease of 32% year over year. Consequently, gross profit decreased by 19% to $329.18 million compared to $407.97 million for the six months ended November 30, 2022. The company booked gross profit of $149.58 million for the second quarter versus $204.64 million reported for the similar quarter of 2022.

Other operating income for the six-month period increased by 25% to close at $33.37 million (2022: $26.62 million).

Total expenses for the six months ended November 30, 2023, amounted to $239.36 million, a 1% decrease relative to $242.10 million reported in 2022. This follows a 48% decline in selling & distribution expenses to $7.07 million (2022: $13.51 million) tempered by a 2% increase in administrative expenses from $228.58 million in 2022 to $232.29 million in the period under review.

Operating profit for the six months ended November 30, 2023, amounted to $123.19 million, a 36% decrease relative to $192.49 million reported in 2022. Operating profit for the second quarter amounted to $44.00 million (2022: $84.97 million).

Net finance costs totalled $25.23 million, a 20% increase from the corresponding period last year (2022: $21.11 million). This follows a 12% increase in finance costs tempered by a 91% decline in interest income.

Pre-tax profit for the six months ended November 30, 2023, amounted to $97.96 million, a 43% decrease relative to $171.38 million reported in 2022. Pre-tax profit for the second quarter amounted to $33.12 million (2022: $74.02 million).

Taxation for the six months ended November 30, 2023, had a 28% decrease to reach $16.39 million (2022: $22.70 million). Net profit for the six months amounted to $81.58 million, a 45% decrease from the $148.68 million reported in 2022. For the second quarter, net profit was $24.84 million (2022: $64.77 million).

Earnings per share (EPS) for the six months amounted to $0.05 (2022: $0.10), while EPS for the quarter totalled $0.02 (2022: EPS: $0.04). The twelve-month trailing EPS was $0.12, and the number of shares used in these calculations was 1,542,467,080.

Notably, PTL’s stock price closed the trading period on January 15, 2024, at a price of $1.45 with a corresponding P/E ratio of 12.54x.

Balance Sheet Highlights:

The company’s assets totalled $2.01 billion (2022: $1.90 billion). The increase in the company’s asset base was primarily due to receivables, which grew by 52% to $666.18 million (2022: $437.24 million), followed by a 44% increase in investments, which closed at $53.85 million (2022: $37.39 million).

Shareholder’s equity was $1.14 billion (2022: $1.06 billion), representing a book value per share of $0.74 (2022: $0.69).

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