November 15, 2024

One Great Studio Company Limited (1GS) for the nine months ended September 30, 2024, reported a 28% decrease in Revenue totaling $261.45 million compared to $361.85 million in the corresponding period last year. Revenue for the third quarter had a 32% decrease to close at $86.13 million compared to $126.40 million for the comparable quarter of 2023.

Cost of sales amounted to $164.69 million (2023: $177.87 million), this represents a decrease of 7% year over year. Consequently, gross profit decreased by 47% to $96.76 million compared to $183.97 million for the nine months ended September 30, 2023. The company booked gross profit of $30.09 million for the third quarter versus $61.34 million reported for the similar quarter of 2023.

Administrative expenses increased by 17% to close at $67.35 million (2023: $57.54 million). As a result, Operating profit decreased by 77% from $126.43 million in 2023 to $29.41 million in the period under review.

Other income for the nine months ended September 30, 2024, amounted to $14.37 million, a 395% increase relative to $2.90 million reported in 2023. Consequently, EBITDA for the nine months ended September 30, 2024, amounted to $41.32 million, a 67% decrease relative to $126.68 million reported in 2023. EBITDA for the third quarter amounted to $11.66 million (2023: $42.54 million).

Interest expense totalled $2.53 million a 91% decrease from the corresponding period last year. (2023: $26.93 million).

Profit before Taxation for the nine months ended September 30, 2024, amounted to $31.44 million, a 66% decrease relative to $93.51 million reported in 2023. Profit before Taxation for the third quarter amounted to $7.34 million (2023: $32.44 million).

Taxation charge for the nine months ended September 30, 2024, had a 95% decrease to reach $851,911 (2023: $16.17 million). As such, Net profit for the period for the nine months amounted to $30.58 million, a 60% decrease from the $77.34 million reported in 2023. For the third quarter, Net profit for the period was $6.98 million (2023: $27.21 million).

Management highlighted, “In Q3 2024, 1GS served 70 clients with an average client spend of $1.2 million. For the quarter, 74% of our revenues came from outside of Jamaica: 56% from North America, 31% from the Caribbean, 4% from Europe, while the remaining 9% came from Asia and Oceania.”

Consequently, Earnings Per Share for the nine months amounted to $0.02 (2023: EPS: $0.06), while Earnings Per Share for the quarter totaled $0.004 (2023: EPS: $0.021). The twelve-month trailing EPS was $0.02, and the number of shares used in these calculations was 1,693,131,075.

Notably, 1GS’s stock price closed the trading period on November 14, 2024, at a price of $0.70 with a corresponding P/E ratio of 36.67x.

Balance Sheet Highlights

The company’s assets totalled $655.43 million (2023: $663.92 million). IGS noted, “This marginal reduction in assets was driven by a 7% reduction in cash and cash equivalents as we continue to reduce debt and invest in fixed assets while paying a dividend in Q2 2024.”

Shareholder’s equity was $603.37 million (2023: $589.39 million), representing a book value per share of $0.36 (2023: $0.35).

Disclaimer:

Analyst Certification – The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure – The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may affect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.