Paramount Trading Jamaica Reporting Improved Q1 Performance With Net Profit Before Taxes Of $17M Increasing By $8M Or 92%.
Hugh Graham, Managing Director of Paramount Trading Jamaica Limited is describing the outlook for the company as very positive, given that the company will have the full capacity of their lubricant manufacturing plant and that the positive outflow from this development will soon be evident.
He was also aligning this positive outlook with the benefits from the general improvement in the economy and that the manufacturing, construction and transportation sectors will influence their growth.
In his report to shareholders in just released unaudited results for the three months ended August 31, 2019, he pointed to an improved performance for the first quarter, with net profit before taxes of $16.7 million increasing by $8.0 million or 92%.
The increase he said was driven by reduction in overheads resulting from the restructuring exercise carried out in the latter part of the prior year.
Commenting further he said that for the first three month ending August 31, 2019, the company generated revenue of $360.6 million, 14 percent less than the $417.0 million produced last year.
This reduction in revenue was mainly due to less than expected outturn in the construction and technical grade brands.
He however expects that the lost sales for the first period will be recovered during the second quarter.
Gross profit of $106.5 million shows a 21% decline over last year, as they did not close on several high value sales during the period, but these will be billed during the second quarter.
Operating expenses of $91.1 million shows a positive prior year variance of $11.5 million reflecting a 11.2 percent decrease.
Restructuring exercises that was implemented during the third and fourth quarter last year are now producing the desired outcome on the expense side of the organization he reports.
Finance cost shows a 93% reduction due to a positive outcome in their foreign exchange risk management, as they produced a foreign exchange gain during this period as against a foreign exchange loss in the prior year.
Management was also able to reduce inventories and receivables by 18% and 5%, respectively and at the same time reduced accounts payables by 33%.
Paramount Trading Jamaica Limited closed the three months ended August 31, 2019 with earnings per share of 9 cents up from the 5 cents reported in 2018.