Home' Trinidad and Tobago Guardian : June 22nd 2014 Contents JUNE 22 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG13
The parent company of the
Express, Citadel and TV6 locally,
OCM continues to expand its
reach and upgrade its digital
media capabilities. In common
with other similar organisations,
special events in the political, sporting and cultural
arenas often provide a useful lift to its profits.
In 2013, its Barbados subsidiary, The Nation
Corporation, acquired a 51 per cent stake in Inno-
gen Technologies Inc for TT$2.39 million. This
company is involved in the renewable energy
business. In Barbados, where energy costs are
extremely high, this can help save on these costs.
Let us now turn to OCM s results for its 2013
Total assets advanced by 6.2 per cent to reach
$756 million from the restated 2012 figure of
OCM s investment in property, plant and
equipment grew from $255 million as at year-
end 2012 to $263.1 million last December. This
change reflects new purchases of $25.5 million,
which were reduced by depreciation charges and
disposals of $17.56 million.
The value of inventories rose by 64 per cent
to $48.3 million from 2012 s $29.4 million. Includ-
ed in this total was the value of newsprint and
other raw materials, which increased by 49 per
cent, moving from $18.4 million in 2012 to $27.5
million last year. Goods held for sale more than
doubled to $13.8 million from $5.9 million in
Trade receivables increased by $10.7 million,
rising to $146.1 million last December from $135.4
million at the end of 2012. This figure comfortably
exceeds the current portion of trade payables by
a multiple of 4.2 times; this translates into an
excess of $111.1 million.
The value of cash and its equivalents increased
to $162.8 million from the 2012 level of $150 mil-
lion. Of this total, 55 per cent ($89.6 million) is
held in interest-bearing short-term bank deposits
with the remainder ($72.9 million) represented
by cash in hand and at bank.
When we deduct the overdraft balance of $1.6
million, the net cash available to the company
is $160.9 million. With outstanding shares of
66,239,018, each share represents "ownership
claim" of $2.43.
Total liabilities increased by 10.1 per cent to
close 2013 at $133.5 million. This was $12.2 million
greater than the 2012 balance of $121.3 million.
In the four previous years OCM s pension plan
enjoyed a surplus, which was recorded as a retire-
ment benefit asset. In 2013, a revised IAS 19
policy was adopted, which removed the previous
concept of recognising an expected return on
The net effect of this change resulted in the
fair value of the defined benefit plan assets tem-
porarily falling below the present value of fund
obligations. In 2013, this resulted in a retirement
benefit obligation of $13.5 million; in 2012, there
was a pension asset of $7.4 million.
Provision for liabilities and other charges
encompasses three major categories: employee
benefits, commissions and fees and libel. As at
year end 2012, this total was $37.6 million. Pri-
marily due to higher provisions for employee
benefits, which increased by $6.5 million, this
balance rose to $46.2 million as at December
Shareholders equity advanced to $652 million
from the 2012 balance of $622.4 million.
Retained earnings increased from $214.7 million
as at December 2012 to $243.1 million last year.
Profit for the year of $84.3 million boosted this
figure. On the other hand, other comprehensive
losses of $13.5 million and dividends to share-
holders of $45.1 million were primarily responsible
for restraining the net increase.
The book value of each share improved to
$9.84 as at December 2013 from $9.40 as at
Revenues and profit
Revenues improved by 11.5 per cent to $551.7
million from 2012 s $494.6 million. This top-
line result was helped by the staging of four elec-
tions during 2013 and new acquisitions.
The cost of sales increased by $18 million, from
$316.7 million in 2012 to last year s $334.7 million.
In 2012, this item represented 64 per cent of
revenues, whereas, in 2013, these costs were 60.7
per cent of revenues. Consequently, gross profit
improved by a robust 21.9 per cent to $217 million
from $178 million in the previous year.
Notably, although OCM s staff complement
declined to 834 people, from 882 at year-end
2012, staff costs rose to $162.4 million from $148
million in 2012.
Administrative expenses jumped by more than
$20 million to reach $95.8 million (2012: $75.7
million) and marketing expenses escalated to
$10.1 million (2012: $4.1 million).
These changes saw operating profit for 2013
register at $111 million; this represented a13.1 per
cent increase over the 2012 figure of $98.2 mil-
Income sourced from dividends increased by
$940k to $1.7 million from $777k in the previous
year. Interest income was almost unchanged at
$4.6 million. Finance costs declined to $2.7
million from $3.7 million in 2012.
Despite slightly higher sales, profits at Tobago
Newspapers Ltd, a 27 per cent associated com-
pany, declined to $294k. Cumberland Commu-
nications Ltd, a 50 per cent joint venture, also
fell to $80k. Consequently, profits from associates
and joint ventures contracted to $374k from
$551k in 2012.
Overall, pre-tax profit came in at $115 million;
this was 14.5 per cent greater than the $100.5
million recorded for 2012.
At the after-tax level, profit for 2013 was $84.4
million, or 15 per cent higher than the $73.3
million earned for 2012. Non-controlling interests
accounted for a modest $92k, leaving shareholders
with $84.3 million.
This result translated into an EPS figure, inclu-
sive of ESOP shares of $1.25; this compares
favourably with $1.10 earned for 2012. The total
dividend payment for 2013 was $0.74 versus
$0.70 for 2012.
Segment performance (see Table above)
OCM divides its businesses into two territories,
each of which is further segmented into two
divisions. The Barbados territory includes oper-
ations in both St Lucia and Grenada.
Other or non-media operations comprise VL
Ltd in Trinidad, which was acquired in 2012;
this company is a distributor of appliances. In
Barbados, the non-media operation is Innogen,
which was bought in 2013.
Media revenues increased by 5 per cent or
from $476 million in 2012 to $500 million last
year. Here, pre- tax profit rose to $108 million
from $98 million in 2012, reflecting an improve-
ment of 10.2 per cent.
Significantly, the Barbados contribution
improved by $7 million; this figure advanced
from $27 million in 2012 to $34 million last
year. Trinidad s contribution to the overall media
increase was a modest $3 million. In this case,
pre-tax profit rose to $74 million from the 2012
level of $71 million.
The company does not separately divulge
what portions of its media operations relate to
print and to electronic segments. Even so, it
has disclosed that the inventory component of
"cost of sales" did increase from $74.7 million
in 2012 to $92.7 million last year, reflecting a
surge of almost 24 per cent.
Given that its stock of newsprint and other
raw materials did increase by 49 per cent and
assume that the print segment consumes the
bulk of this material, we could reckon that
profitability at the print segment was lower in
Revenues for the first quarter were $3 million
lower than for the comparative period in
2013.This decline was largely due to the lack
of election activity in the current period. Gross
profit registered at $43.3 million from 2012 s
Administrative expenses increased by 10 per
cent to $19.8 million from $18 million in the
2013 comparative quarter. However, marketing
expenses declined by 10 per cent to $2.1 million.
These changes saw OCM deliver an operating
profit of $21.4 million, down by 10 per cent
from $23.8 million in the 2013 period.
Helped by lower finance costs and higher
interest income, pre-tax profit registered at
$22.4 million (Q1 2013: $24.6 million). The
after-tax result came in at $16.3 million from
the previous level of $18.1 million.
These changes saw EPS for the current period
come in at $0.24 compared with last year s
Share price and dividend yield
OCM s share price started the New Year at
$18.50 and has risen almost continuously since
then. In early April, the price shot past the
$20.00 mark and continued its upward trek;
the price recently closed at $23.00.
Relating its 2013 dividend of $0.74 to this
price, the share gives investors a yield of 3.2
The exclusive broadcast of the World Cup
on its television station has cheered investors,
who expect to see this event contribute to a
robust second quarter profit and a higher interim
One Caribbean Media see
in Q1 profit
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