Business
JAM | Jan 17, 2022

Paramount Trading records 141% jump in half year net profit

/ Our Today

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Total revenues increased by 15% to $770.49 million

Lubricants manufacturer and dealer, Paramount Trading (Jamaica) has seen a big jump of 141 per cent in net profit during the half-year period ended November 30, 2021.

Net profit amounted to $47.51 million compared to the $19.70 million posted over the comparable six month period in 2020. However, for the second quarter, net profit also registered a big jump, moving from $4.52 million in 2020 to $28.58 million for the November 2021 quarter.

Pre-tax profit for the half year totalled $54.29 million, 141 per cent more than the $22.51 million reported in prior corresponding period. Taxes of $6.79 million were imposed relative to $2.81 million in 2020.

Total revenues for the six months recorded a 15 per cent increase to $770.49 million, up from $668.61 million reported in 2020. For the November quarter, revenues rose 31 per cent to close at $401.18 million (2020: $306.60 million).

Reasons for improved financial performance

Paramount Trading, which is listed on the Jamaica Stock Exchange explained that, “the reduction in curfew hours, elimination of ‘no movement days’ and opening some schools to face to face during the quarter contributed to a general improvement in the economy. During the period, revenue growth strategies employed by the company resulted in improvement in our revenue, led primarily by our food division”.

Hugh Graham, managing director of Paramount Trading outside the company’s offices.

Direct expenses closed the period at $529.47 million 17 per cent growth compared to the $452.26 million booked in the corresponding period in 2020. Notwithstanding, gross profit rose by 11 per cent to $241.02 million, up from $216.36 million in 2020.

For the quarter, gross profit closed at $129.92 million relative to $100.02 million reported in the prior corresponding quarter. Other operating income amounted $22.67 million for the six months period, representing a 78 per cent uptick compared to the $12.75 million booked for the previous year’s corresponding period.

For the second quarter, other operating income grew by 24 per cent to close at $9.54 million (2020: $7.69 million).

Small increase in admin expenses

Administrative expenses grew three per cent to $181.30 million, up from the $176.83 million recorded for 2020. Selling and distribution expenses rose by eight per cent for the six months period to close at $5.60 million (2020: $5.20 million). As such, operating profit amounted to $76.79 million compared to $47.07 million for the same period of the prior financial year.

For the quarter, operating profit rose by 170 per cent to close the quarter at $45.16 million (2020: $16.75 million). Finance income amounted to $1.84 million up 55 per cent when compared to the $1.19 million reported for the prior comparable period, while finance costs fell six per cent to total $24.33 million (2020: $25.75 million).

As of November 30, 2021, the company’s assets totalled $1.75 billion, $48.23 million more than the $1.70 billion quoted a year ago. The main contributor to this growth due to ‘Receivables’ which closed at $346.37 million a 38 per cent growth relative to the $250.30 million recorded in 2020.

Shareholder’s equity as of November 30, 2021 stood at $843.83 million (2020: $814.08 million) resulting in a book value per share of $0.55 (2020: $0.53).

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