Home' Trinidad and Tobago Guardian : November 21st 2013 Contents NOVEMBER 2013 • WEEK THREE www.guardian.co.tt BUSINESS GUARDIAN
STOCKS | BG15
Share prices are often referred
to as leading indicators. This
means they tend to anticipate
the economic future and their
movement is often used as a
guide to such activity.
A security that is marketable can be
described as one that is regularly and freely
traded. Consequently, the price changes in
these shares can be used as a fairly reliable
guide as to our economic future. Even com-
panies that are not frequently traded may also
provide useful insight as to the short to medium
term economic prospects.
Painting is a very fundamental and common
activity. It is related both to home improve-
ments and to general construction activities.
The results of Berger Paints Trinidad Ltd for
the six months ending on September 30, 2013,
showed some improvement.
Revenues advanced by 9 per cent to $30.1
million from $27.6 million for the comparative
period in 2012. More importantly, profit from
operations moved from a loss of $971k in the
2012 period to a profit of $493k in the current
After allowing for reduced finance expenses
of $147k (2012:$223k) and taxation of $120k
(2012: there was a tax credit of $212k), the net
profit picture came in at $240k; this translates
into an EPS figure of 5 cents. In the 2012
period, Berger reported a loss of $969k or 19
cents per share.
One of the factors that contributed to this
result was the reformulation of its paints to
reduce odour while maintaining quality and
improving the environment. This technical
change was enhanced by an increased product
offering. Both these factors have played their
part in contributing to the improved company s
results for the period under review.
This security is not actively traded, so it is
not surprising that Berger s share price has
remained stable at $3.60.
Trinidad Cement Ltd
It is almost impossible to have higher levels
of economic activity without pouring cement
in some form or the other. Consequently, the
nine-month results from Trinidad Cement
Ltd provide some additional evidence of more
buoyant economic activity.
For the three months to September, revenues
advanced by 16.4 per cent to reach $496 mil-
lion compared with $426.3 million for the
same period in 2012. Despite this improved
top-line, EBITDA declined marginally to $85.4
million from $87.5 million for the same period
in 2012. This lower result was attributed to
unplanned stoppages in both Trinidad and
Barbados due to technical difficulties.
The current quarter s result was helped by
a $10.3 million decline in finance costs to $51.4
million. In addition, a tax credit of almost $6
million helped TCL produce a period profit
of $8.5 million.
Of this figure, $6.1 million related to the
parent company, while $2.4 million was attrib-
utable to minority interests. This result trans-
lates into EPS of 2.5 cents for the third quarter
and brings the year-to-date EPS up to 28.2
cents per share.
After peaking at $2.94 on August 30, 2013,
the share price seems to have settled at a more
realistic $2.20 in recent times. The company
still has some unresolved administrative issues
and probably has some room to further rene-
gotiate its total debt package.
TCL reports that it has met all debt service
payments and financial ratio covenants under
its current debt restructuring agreement. It is
probably hoping that more robust sales,
improved profitability and a favourable eco-
nomic environment, especially in Trinidad,
would be sufficient to pull it through the
These conditions, if they persist, should put
the company in a better financial position to
start a new debt negotiation exercise.
Point Lisas Port Development
A higher level of economic activity can both
precede and accompany higher levels of trade.
For clues as to what has happened on that
level, we turn to Point Lisas Port Development
Company Ltd (Plipdeco).
For the first nine months of 2013, Plipdeco
experienced a 13 per cent increase in con-
tainerised cargo while general cargo declined
by 19 per cent when compared to the 2012
levels. This mixed result requires further expla-
With respect to containerised cargo, exports
increased by 6 per cent while imports rose by
9 per cent. In addition, transshipment cargo
experienced a 44 per cent increase. In the case
of general cargo operations, imports increased
by 7 per cent while transshipments were 111
per cent higher than the 2012 levels.
For the third quarter ending on September
30, 2103, revenues of $65 million were almost
identical to the comparative period in 2012.
However, the gross profit margin fell from
$48.8 million last year to $46.8 million in the
Excluding fair value gains on investment
properties, the net after-tax profit for the
quarter slipped from $7.25 million in 2012 to
$5.955 million in the current session. These
figures result in EPS of 15 cents for the current
period versus 18 cents for the 2012 period.
These numbers reflect the negative impact of
higher direct costs and other operating expens-
es, mitigated to some extent by the beneficial
effects of higher investment income and lower
finance costs and taxes.
For the full nine months, revenues, gross
profit and EPS were all ahead of the 2012
numbers by healthy percentages.
Revenues advanced by 10.5 per cent to reach
$191.9 million from last year s $173.6 million.
More robustly, gross profit moved ahead by
19.2 per cent or from $115.5 million in the 2012
period to $137.7 million in the current session.
Excluding fair value gains, the EPS advanced
vibrant 50 cents in the current period.
On May 22, 2013, this share traded at $3.55.
The share price has since recovered somewhat
and closed recently at $3.80. Based on a rea-
sonable prospect that the company can and
will pay a higher dividend in 2014, demand
for this share seems to have improved recent-
LJ Williams Ltd
As more money flows through the economy,
consumers need opportunities to express their
individuality and enhance their living envi-
ronment. One such opportunity can be found
in home furnishings and similar products. LJ
Williams Ltd, especially via its Home Store
outlet, offers consumers opportunities to
assert their uniqueness.
In the company s half-year report to Sep-
tember 2013, it is stated that sales at its Home
Store outlet improved by 9 per cent over the
comparative period in 2012. More importantly,
gross profit at this subsidiary advanced by 12.7
per cent over the 2012 result.
Overall, LJ Williams sales improved to $46.6
million from $43.1 million in the first six
months of 2012; this reflects an improvement
of 8 per cent. Of greater import was the strong
increase in operating profit; this measure
moved from a modest $96k in the 2012 period
to a much healthier $2.9 million in the current
The parent company, the shipping division
and the hardware divisions all made positive
contributions to these results. In addition,
Movalite Ltd achieved a break-even position;
this company is expected to make a positive
contribution to the second half results. These
results were also positively influenced by the
profit on the July 8, 2013 sale of the company s
investment in PALIG (formerly called Algico).
Finance costs for the period fell to $1.872
million from the $2.017 million expended in
the 2012 half-year. In addition, tax costs
declined from $130k in 2012 to $109k in the
These changes allowed the company to
report an after-tax profit of $921k; this result
compares very favourably with the loss of
$2.05 million recorded for the same period in
2012. The current period s result translates
into an EPS of 4 cents.
Flavorite Foods Ltd
As higher levels of discretionary income
flow through the economy, consumers propen-
sity to increase their consumption of self-
indulgent foods and similar fare improves.
Flavorite Foods Ltd is one example of a com-
pany that can satisfy this demand.
Flavorite s sales for the nine months ended
September 2013 moved from $112.2 million in
2012 to $119 million in the 2013 period; this
change reflects an improvement of $6.7 million
or 6 per cent.
The consolidation of the operations of its
subsidiary, Ranke Ltd, led to increased one-
time costs. This change pulled down gross
profits to $2.8 million from the $4.4 million
reported for the 2012 period. In addition, the
company decided to close its loss-making
Barbados subsidiary, incurring a one-time cost
of $1.134 million.
Pre-tax profits came in at $1.69 million
(2012: $3.73 million). The tax charge for both
periods was level at $1.2 million. These changes
led to the company reporting a profit of $486k
for the 2013 period; this compares with a profit
of $2.53 million for 2012. The 2013 results
translate into an EPS of 6 cents (2012: 33
Flavorite decided to maintain its interim
dividend of ten cents per share, even after
recording this lower profit. While the company
has adequate retained earnings to draw upon,
this action also suggests that Flavorite is con-
fident about its ability to deliver strong results
in the last three months of the year.
With the exception of TCL, the shares of
most of the companies in this article are not
actively traded. Consequently, despite generally
improved performances and excluding one-
off items, their recent performance does sug-
gest that our economy has achieved some
measure of growth.
The results, however, may not be fully con-
vincing and the current quarter s performance
could provide further evidence of positive
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