… but direct expenses closed 21% higher

Jamaican listed lubricants provider, Paramount Trading registered a bumper combined third quarter ended February 2022 with net profits surging by 242 per cent to end the period at $94.95 million.

During the comparable period in 2021, net profit ended at $27.74 million. Taxes during the review period amounted to $13.56 million relative to $3.96 million in 2021.

The growth in net profit was even more significant during the third quarter (February), growing by as much as 489 per cent to J$47.44 million, up from the J$8.05 million posted 12 months prior. Earnings per share for the nine months amounted to J$0.062 (2021: $0.018).

For the quarter, earnings per share closed at J$0.031 (2021: J$0.005). For the combined three quarters revenues rose by 22 per cent to $1.23 billion, up from $1.02 billion reported in 2021. For the third quarter, revenues rose 34 per cent to close at J$463.96 million (2021: $347.24 million).

The management pointed to certain contributing factors for this positive financial performance.

According to the management, “the reduction in curfew hours, elimination of ‘no movement days’ and the re-opening of schools during the quarter contributed to a general improvement in the economy”.

In addition, during this period, revenue growth strategies employed by the company resulted in improvement in its revenue, led primarily by its Food Grade division. Direct expenses closed the period at $835.24 million, a 21 per cent increase relative to the $691.79 million booked a year ago.

Notwithstanding, gross profit rose by approximately 23 per cent to $399.21 million (2021: $324.07 million).

Other operating income amounted to $33.57 million for the nine months period compared to $18.78 million booked for the previous year’s corresponding period. For the third quarter, other operating income closed at $10.90 million (2021: $6.03 million).

Marginal growth in admin expenses

Administrative expenses grew by six per cent to $282.71 million, up from the $266.76 million recorded for 2021. Selling and distribution expenses rose by 15 per cent for the nine months to close at $9.60 million (2021: $8.34 million).

As such, operating profit amounted to $140.47 million compared to $67.74 million for the same period for the prior comparable financial year. For the quarter, operating profit surged by 208 per cent to close at $63.69 million (2021: $20.67 million).

Finance cost increased to total $34.72 million (2021: $37.28 million). For the quarter, finance cost closed at $10.38 million (2021: $11.53 million). As at February 28, 2022, the company’s total assets totaled $1.79 billion, 11 per cent more than the $1.61 billion quoted a year ago.

The main contributors to this were the growth in ‘Inventories’ and ‘Receivables’ which closed at $504.97 million (2021: $440.03 million) and $380.15 million (2021: $293.15 million), respectively.

Shareholders’ Equity as at February 28, 2022 stood at $829.57 million (2021: $760.43 million), resulting in a book value per share of $0.54 (2021: $0.49).