Home' Trinidad and Tobago Guardian : June 27th 2013 Contents Today, we at Bourse, will be
reviewing the Half Year 2013
performance and outlook for
Bank Ltd and Neal and Massy
Ltd and also the first quarter
2013 performance and outlook for Unilever
FirstCaribbean International Bank
LtdFirstCaribbean International Bank Ltd (FCIB)
registered earnings per share (EPS) of US$0.021
for the half-year (HY) ended April 30, 2013.
This represents a 16.7 per cent increase from
the EPS of US$0.018 reported in HY 2012.
The directors have approved an interim div-
idend of US$0.015 per share, payable on June
28, 2013 to shareholders of record as at June
At the top-line, FCIB reported a 2.7 per cent
fall of US$5.87 million in net revenue due to
the struggling economic conditions of the
region. Both net interest income and operating
income registered declines of six per cent and
8.4 per cent, to US$185.9 million and US$77.4
Higher non-credit losses and higher business
taxes gave rise to operating expenses climbing
5.9 per cent to US$178.1 million for the period
under review. On a positive note, loan loss
impairment plummeted 31.5 per cent or
US$22.4 million due to lower specific provision.
(Exhibit 1). FCIB s results reveals that excluding
the Loan loss impairment allowance the bank s
performance continues to be satisfactory. Over-
all, total expenses declined 5.5 per cent to
Net income totalled US$34M and was up
15.5 per cent versus net income of $29.4 million
for the corresponding period in 2012. Looking
at the balance sheet, total assets increased
approximately 1.67 per cent to US$11.7 billion,
while total liabilities increased 1.71 per cent
from US$9.8 billion to US$10.1 billion. As
reported, the bank s Tier 1 and total capital
ratios remain strong at 23 per cent and 25 per
cent, respectively, above the minimum reg-
Reduction in the loan loss portfolio proves
to be beneficial to the company. FCIB continues
to be challenged by the economic imbalances
of the majority of territories in which the
Also, these economies are more tourist based
economies and have been adversely affected
by the lacklustre economic recovery in the US
and Europe. Given a falling top line, FCIB
should focus on reducing operating costs in
addition to lower loan loss impairment.
At a price of $7.90, FCIB is trading at a
trailing P/E of 26.26 times, above its five-year
average of 19.1 times. The dividend yield on
the stock stands at 2.40 per cent. BOURSE
recommends a HOLD.
Neal and Massy Ltd
For the Half Year ended March 31, 2013
(HY1 2013) Neal and Massy Ltd (NML) reported
a 12.1 per cent increase in Earnings per share
(EPS) inclusive of discontinued operations to
$2.68. EPS from continuing operations was
up 3.1 per cent.
The absence of further charges to the dis-
continued operations contributed to the
improvement in overall earnings for the period
under review. An interim dividend of $0.50
per share was declared, which is 11 per cent
above last year s interim dividend of $0.45.
The dividend was paid on June 18, 2013.
For HY 2013, NML experienced a 0.6 per
cent growth in net revenue to $4.7 billion,
which is indicative of the flat and weak
economies in the region and NML s exiting
the international inward insurance business.
Operating profit increased 2.8 per cent to $374
million. Share of results of associates and joint
ventures experienced a 28 per cent increase
to $26 million.
Profit before tax (PBT) from continuing
operations climbed 4.2 per cent to $401 million
versus the prior year figure of $385 million.
Breaking this down into segments, PBT
improvements were delivered by the automo-
tive, insurance and Guyana operations increas-
ing 14.2 per cent, 164.3 per cent and 4.4 per
cent, respectively. The energy and industrial
gases and integrated retail business units
reported a fall in PBT of 8.1 per cent and 2.4
per cent, respectively (Exhibit 2).
Couples Hotels from Jamaica has leased the
Almond Casuarina Beach (ACB) property. The
agreement provides Couples with the option
for the complete acquisition of ACB by Sep-
tember 2013 or they can enter into a long-
term lease agreement.
The chairman indicated that in the last
quarter the Group signed a project development
agreement with Mitsubishi Corporation, Mit-
subishi Gas Chemicals Company and the Gov-
ernment of T&T for the construction of the
first phase of the petrochemical complex in
La Brea Trinidad.
Additionally, the group is in the final stages
of completing the acquisition of an energy
services company in Trinidad and has a mem-
orandum of understanding to acquire a group
of car dealerships in Colombia.
These developments paint a positive picture
for future revenue generation for NML. It
shows the group s commitment to continuous
expansion and diversification in order to grow
the bottom line.
At a price of $59.00 NML s is trading at a
trailing P/E multiple of 11.43 times, a premium
to its five-year average P/E multiple from con-
tinuing operations of 9.7 times. At the current
price, investors are receiving a dividend yield
of 2.6 per cent on the stock. In light of the
aforementioned, BOURSE recommends a
HOLD on NML.
Unilever Caribbean Ltd
Unilever Caribbean Ltd (UCL) reported earn-
ings per share of $0.50 for the three months
ended March 31, 2013. This represents an 11.1
per cent increase from the first quarter earnings
of $0.45 reported in 2012.
Turnover increased by 4.7 per cent year-
on-year (YoY), from $127.5 million to $133.5
million. Cost of sales was up 4.2 per cent, but
was insufficient to erode of UCL s gross profit
margin which increased from 38.2 per cent to
38.5 per cent for the same period.
Total expenses rose by 4.3 per cent over the
reported first quarter for 2012. Despite higher
expenses for the period, UCL s operating profit
grew 8.3 per cent to $17.35 million. The oper-
ating profit margin increased from 12.6 per
cent to 13 per cent. Profit after tax increased
by 9.3 per cent to $13.02 million.
Despite the increase in the Group s turnover
for the period, double digit growth may be a
challenge given the sluggish consumer demand
in all the Caribbean economies although mar-
gins may be aided by falling commodity prices
on the global front.
Management continues to invest in increased
advertising and promotional spending as well
as consumer market research in order to grow
market share and expand profitability margin.
UCL has shown operational efficiency in main-
taining its gross profit margin and growing
profit after tax.
At a price of $52.32 the stock is trading at
a trailing P/E multiple of 23.25 times, a pre-
mium to its three-year average of 15.5 times.
The Group s trailing dividend yield (exclusive
of the special dividend) is 2.96 per cent (Exhibit
3). BOURSE recommends a HOLD on the
JUNE 2013 • WEEK FOUR www.guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG19
Bourse Securities Ltd
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