Home' Trinidad and Tobago Guardian : November 17th 2016 Contents BG14 STOCKS
BUSINESS GUARDIAN www.guardian.co.tt NOVEMBER 17 • 2016
Berger Paints Trinidad Ltd
Although not a big player in
the local market, Berger
Paints Trinidad Ltd (BER)
offers a useful guide as to
the health of the fragmented
and competitive painting
supplies industry, which is a sub-set of the
larger construction sector.
For its first quarter ending in June 2016,
BER recorded sales of $11.17 million and pro-
duced a loss to shareholders of $1 million and
negative EPS of $0.28; these results contrasted
sharply with 2015 revenues of $14 million and
positive EPS of $0.07 for that period.
Its recently released second quarter results
to September 2016 show quarterly revenues
improving slightly to $11.66 million, which
boosted the year-to-date figure to $22.83 mil-
lion. The loss in the second quarter improved
to $0.22 per share, which saw the half-year
EPS register at a negative $0.50.
These results compare poorly with the rev-
enues of $28.38 million and EPS of $0.07 for
the comparative half-year to September 2015.
For the full year to March 2016, BER recorded
sales of $58.13 million, EPS of $0.12 and it
paid a dividend of $0.05 on July 13, 2016.
Traditionally, both sales and profit tend to
improve in the company s second half; given
the current state of the economy and, in par-
ticular, the construction sector, how likely is
it that BER will record a positive result for the
current fiscal period, which ends next March?
The last trade was on March 15, 2016 at
$3.68. Current bids are at $3.70 and offers to
sell at $4.05, which might suggest some meas-
ure of optimism.
Trinidad Cement Group
Operating in Barbados, Jamaica and T&T,
the TCL Group still felt the negative effects
of our local economic slowdown.
For the trimester ending September 2016,
TCL recorded reduced revenues of $450 million
(2015: $550.1 million). In addition, EBITDA
contracted to $81.7 million from the prior
trimester s $158 million. This fall was attributed
to planned maintenance shutdowns in Jamaica
(for seven weeks) and in Trinidad for eight
During the quarter, there were one-off
charges totalling $5.04 million relating to man-
power restructuring and inventory items. Over-
all, the third quarter s results showed EPS of
$0.033 compared with $0.155 for the 2015
For the nine months to September 2016,
revenues declined to $1.44 billion from $1.64
billion while EBITDA slowed to $394.3 million
from $477.6 million.
The 2015 result was helped by a net gain
on its debt restructuring exercise of $205.8
million. In 2016, no such benefit was available.
Further, inventory write-downs of $73 million
and manpower restructuring costs of $27.1
million pulled down the period s results. Its
continuing emphasis on improving plant
capacity resulted in depreciation charges
increasing to $89.9 million from $84.7 mil-
Finance costs declined by $20.5 million to
$107 million from $127.5 million. After allowing
for taxes of $41 million and minority interests
of $13.2 million, the period profit attributable
to shareholders registered at $43.7 million.
This translated to EPS of $0.12 (2015: $1.19).
In no small measure, this result was influ-
enced by the performance of its 74.08 per
cent owned Jamaican operations. For the nine-
month period that subsidiary generated J$11.98
billion (about TT$600 million) in revenues
and produced EPS of J$1.14, which equates to
about TT$0.06. In addition, the Jamaican
economy, which grew at an annual rate of 2.3
per cent in the third quarter, is expected to
do so at a robust pace into 2017.
Although total assets declined to $2.94 billion
from $3.03 billion, increases were shown under
property, plant and equipment and cash bal-
ances. The former rose to $1.744 billion from
$1.730 billion while the latter advanced to
$313.9 million from $288.5 million.
Total liabilities fell to $1.96 billion from
$2.08 billion. Of particular note, total debt
declined to $1.08 billion from $1.17 billion.
TCL has a large portion of its debt denominated
in US dollars. The servicing of this debt is
heavily dependent on the company earning
foreign exchange, usually via exports.
Even after resuming dividend payments,
which consumed almost $15 million, total
shareholders equity rose to $982.8 million
from last December s $963.3 million; this was
mostly helped by the cumulative improvement
in retained earnings to $433 million from
Although the revenue projection for the
final quarter may be challenging, in the absence
of any further one-off charges the period profit
should be considerably better than what was
recorded in the third quarter. This suggests
that the EPS for the full year could be as high
as $0.20. If attained, then the dividend for
the year could be higher than the $0.04 paid
in June 2016.
During October, TCL s share price exhibited
some interesting movements. On the 6th,
150,142 shares traded at $3.25, then on the
18th, 28,503 shares moved at $3.72. This was
followed by trades of 81,777 at $3.99 on the
21st. Following the publication of these results
on October 28, the price dropped to $3.52 on
the 31st with 28,905 shares changing hands.
Last Friday, the price closed at $3.39.
Reflecting the slower pace of local economic
activity, PLIPDECO Ltd recorded lower rev-
enues both for the third quarter and for the
nine months to September 2016.
One likely contributing factor, that is not
mentioned in either its half-year or third quar-
ter report, is the loss of income from Arcelor-
Mittal, which is in receivership; it would be
helpful to quantify this figure.
The company experienced a 29 per cent
decrease in containerised cargo to 46,295 TEU s
and a nominal increase in general cargo volumes
to 313 tonnes. Containerised cargo experienced
a 63 per cent contraction in trans-shipments,
a 16 per cent fall in imports and a 19 per cent
decline in exports. For general cargo, trans-
shipments suffered an 86 per cent shrinkage,
while exports rose by 4 per cent and imports
increased by 1 per cent.
Total revenue for the period declined to
$191.1 million from $216.6 million while direct
costs fell to $63.5 million from $66.1 million.
Consequently, gross profit contracted to $127.6
million from $150.6 million.
Cost savings helped lower both adminis-
trative expenses and other operating expenses;
the former declined to $71.3 million from $73.3
million while the latter fell to $49.8 million
from $56.3 million. On the other hand, the
unrealised fair value gain on investment prop-
erties rose to $69.7 million from $58.4 million.
After including other income of $0.62 million,
the operating profit ended at $76.9 million,
which was lower than the $79.8 million record-
ed for the 2015 period.
Investment income rose to $4.1 million from
$3.5 million. Finance costs at $5.4 million was
higher than the previous period s $4.6 million.
These changes resulted in a pre-tax profit of
$75.6 million compared with $78.8 million for
the 2015 period.
Taxes climbed to $8.9 million from $5.3 mil-
lion, which resulted in a net profit of $66.8
million versus $73.5 million. This result trans-
lated into a current EPS of $1.68 versus $1.85
in the previous period.
If we backed out the unrealised gain on its
investment properties for both periods, the
net figure contracts to a loss of $2.9 million
for the current period versus a profit $15.1
million in 2015.
Total assets increased from last December s
$2.35 billion to $2.53 billion. The largest con-
tributing factors were the increase in invest-
ment properties to $1.64 billion from 1.57
billion and the rise in property, plant and
equipment to $612.7 million from $608.6 mil-
Total liabilities rose to $491.6 million from
$376.2 million. The most notable increase was
shown under long and medium-term liabilities
(ie debt), which climbed to $163.8 million from
Shareholders equity improved to $2.03 bil-
lion from $1.97 billion. This change was helped
by increases in both retained earnings and
Since the publication of these results,
demand for the share has weakened.
Unilever Caribbean Ltd
Unilever Caribbean Ltd (UCL) manufactures
and distributes a range of products under the
categories of home care, personal care and
foods. Although it manufactures and exports
some products, it still has challenges with
accessing adequate sums of foreign exchange.
In 2015, about 40 per cent of its sales or
about $219 million were sold in external mar-
kets. However, it is likely that a significant
portion of these external sales represent the
re-sale of products, which were first imported
to its distribution and manufacturing facilities
For the trimester ended September 2016,
UCL recorded a 1.9 per cent decline in turnover
to $136.3 million from $138.9 million. After
allocating $82.6 million to cost of sales (2015:
$84.6 million), the gross profit registered at
$53.7 million versus $54.4 million for 2015.
Both selling and distribution and adminis-
tration expenses exhibited increases; the former
advancing to $38.2 million from $34.6 million
while the latter rose to $7.1 million from $5.8
million. These changes resulted in an operating
profit of $8.4 million versus $13.98 million.
After allocating $73,000 to finance costs
(2015: $54,000), its pre-tax profit registered
at $8.36 million (2015: $13.93 million). At the
after-tax level, the current quarter ended at
$6.3 million versus $10.45 million. This result
saw EPS decline to $0.24 from $0.40.
Despite this challenge, UCL reported sales
of $409.4 million for the nine months to Sep-
tember 2016, which was an improvement of
4.2 per cent over the $392.9 million recorded
for the 2015 comparative period.
All its profit figures were higher than the
previous period. Net profit ended at $30.1 mil-
lion compared with $28.8 million for the 2015
period. These results translated into EPS of
$1.15 versus $1.10.
Total assets rose to $439.7 million from
$430.8 million last December. Property, plant
and equipment rose to $109.7 million from
$92.9 million. The company s upgrading and
reinvesting in its local operations will eventually
result in higher sales, both local and export.
The purchase of equipment ($20.5 million)
and payment of dividends ($32.8 million) con-
tributed to lower cash balances, which declined
from last December s $91.8 million to end at
Total liabilities rose to $230.5 million from
$218.8 million. Here, the principal increase
was in the amount due to parent and related
companies, which ended at $85.2 million from
Total equity fell to $209.3 million from $212
million as at December 2015. This reduction
reflected lower retained earnings, which
declined to $147.7 million from $150.4 million.
Current profits of $30.1 million added to the
balance while dividends of $32.8 million low-
ered the closing figure.
UCL s shares usually enjoy a high P/E mul-
tiple and a reasonable dividend yield. Even
though its profits have held up reasonably well
in a difficult environment, investors are
demanding a better relationship between its
earnings, dividends and share price.
The last trade of 20 shares was executed
on October 28, 2016 at $59.87. Last week, bids
were at $51 while offers came in at $59.87.
Next week, we review the 2015 results of Clico.
• Berger Paints Trinidad • PLIPDECO Ltd
• Trinidad Cement Ltd • Unilever
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