Home' Trinidad and Tobago Guardian : December 5th 2013 Contents DECEMBER 2013 • WEEK ONE www.guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG15
For the three months
ended September 2013,
delivered improved rev-
enues of J$17 billion;
this result was ten per
cent greater than the J$15.5 billion
reported for the same period in 2012.
Unfortunately, gross profit slipped from
J$822.5 million in 2012 to J$636.5 mil-
lion in the current period, reflecting
a decline of 22.4 per cent.
However, other income improved
from J$209.3 million in 2012 s third
quarter to J$411.5 million in the same
period in 2013. This healthy change
boosted profit from operations up to
J$1.048 billion in the current period,
which represented a modest change
from the J$1.032 billion reported for
the same period in 2012.
After allowing for interest income
and expenses as well as share of results
from associated companies, the pre-
tax profit for 2013 came in at J$1.022
billion (2012: J$1.013 billion).
All major business lines reported
increases in revenues. Of particular
note was the improvement in the
money services division, which saw
revenues grow by 15.2 per cent in the
third quarter to J$1.420 billion from
J$1.232 billion in the third quarter of
2012. This improvement was due to
the extension of its FX Trader business
to the business community.
Pre-tax profits at this division also
increased by a respectable 21.8 per
cent, moving from 2012 s third quarter
result of J$404 million to a 2013 result
of J$492.5 million.
The retail and trading division
reported a 10.8 per cent increase in
revenues for the quarter, moving from
J$1.54 billion in 2012 to J$1.71 billion
in the current session.
However, pre-tax profits at this divi-
sion moved from J$26.6 million last
year to J$82.2 million in the most
recent three months of 2013; this rep-
resents a robust 209 per cent improve-
The insurance division delivered the
weakest results. In 2012, this divi-
sion delivered pre-tax profit for
the first nine months of the year
of J$319.3 million; of this sum,
J$161 million was earned in the
third quarter of 2012.
Now, in 2013, the cumulative
result for the nine months to Sep-
tember 2013 show a pre-tax loss
of J$29.2 million; of this result, a
loss of J$89 million can be attrib-
utable to the third quarter of 2013.
This poor result was primarily
attributable to additional claims
discovered at Jamaica Interna-
tional Insurance Company Ltd
during the course of a review exer-
Despite a modest 9.2 per cent
improvement in nine-month rev-
enues to J$33.2 billion, the food
trading division saw its pre-tax
profits improve by 21.2 per cent
to reach J$874 million from J$721
million in the earlier period. How-
ever, in the third quarter, pre-tax
profit contribution declined from
J$222.3 million in 2012 to a more
modest J$133.4 million in 2013 s
Two contributing factors to this
lower result were increases in raw
materials and energy costs.
The results for the banking and
investment segment were helped
by both loans growth and increas-
es in non-interest income.
Revenues for the first nine
months of 2013 improved mod-
estly to J$3.99 billion from J$3.95
billion in the 2012 period.
After-tax profit grew from
J$469.1 million in 2012 to J$504.3
million in 2013, or by 7.5 per cent.
Using only third quarter figures,
the pre-tax measure rose by a
strong 43 per cent, moving from
J$136.7 million in the July-Sep-
tember 2012 period to J$195.7 mil-
lion for the same period in 2013.
For the full nine-month period
GKC reported revenues of J$49.7
billion, representing an improve-
ment of 8.0 per cent over the J$46
billion reported for the same peri-
od in 2012.
The profit attributable to share-
holders for the current period
came in at J$1.977 billion; this is
10 per cent greater than the J$1.8
billion earned for the 2012 session.
The diluted EPS improved from
J$5.51 in 2012 to J$5.92 in the cur-
Perspective and share price
Against the background of the
national debt exchange and private
debt exchange programmes con-
ducted earlier in the year, these
results are quite commendable.
The company has started its pro-
gramme of share buybacks and it
is expected that GKC will have
ample opportunity to achieve its
share buyback targets over the
next year. As at November 20,
2013, GKC announced that a
modest 2,000 shares were bought
under this programme.
On the local exchange, GKC s
share recently traded at TT$3.56,
down from TT$4.15 in mid-Octo-
ber. On its home market, the share
generally trades within a narrow
band of J$56.00 to J$58.00 and
does not seem to have been undu-
ly affected by either these results
or the share buyback programme.
At this time of the year, one
would normally use the EPS in
the fourth quarter to calculate a
trailing EPS figure.
In GKC s case, this would give
a very misleading figure. This is
because, in the last quarter of
2012, the company benefitted
hugely from the reduction in the
tax rate from 331G3 per cent to 25
per cent. This change had the
effect of allowing GKC to report
EPS of J$5.41 for that quarter
alone! This figure represented
more than half of 2012 s EPS of
Based on recent trends, it is
likely that the fourth quarter EPS
could be a modest J$2.00. This
would bring the 2013 EPS up to
At that level, and using a share
price of J$58.00, the P/E multiple
would be 7.50 times.
3Q results for GraceKennedy
Links Archive December 4th 2013 December 6th 2013 Navigation Previous Page Next Page