Date: November 15, 2018
For the six months ended September 2018, Radio Jamaica Limited’s (RJR) revenues increased by 9% from $2.48 billion in 2017 to $2.71 billion. For the quarter, revenues closed at $1.36 billion (2017: $1.26 billion), representing an 8% growth. RJR indicated that, “this increase was largely due to the staging of a part of the finals of the 2018 FIFA World Cup football competition in the quarter.”
Direct expenses increased to $1.50 billion, this compares to the prior year’s figure of $1.23 billion, indicating a rise of 21%. For the quarter, direct expenses went up by 25% amounting to $746.92 million (2017: $597.42 million). The company stated that, “this was largely due to the rights and technical fees associated with 2018 FIFA World Cup project.”
As such, gross profit for the six months amounted to $1.21 billion relative to $1.25 billion for the corresponding period in 2017. While for the quarter, gross profit closed at $611.48 million (2017: $664.40 million).
Total expenses increased slightly for the period under review by 4% from $1.32 billion in 2017 to $1.37 billion in 2018.
There was a 9% increase in selling expenses to $401.46 million (2017: $369.65 million). RJR mentioned that, “this increase was due substantially to higher agency commissions, associated with higher revenues in the quarter and a 2% increase in administrative expenses to $612.25 million (2017: $598.86 million).
For the quarter, selling expenses and administrative expenses increased to $204.17 million (2017: $176.93 million) and $321.39 million (2017: $308.75 million). RJR mentioned that, “the increase in selling expenses was due substantially to higher agency commissions, associated with higher revenues in the quarter.” While for administrative expenses, they further noted that, “the expenses were held to a 4% increase despite inflationary effects and contracted union negotiated salary increases of over 5%.”
Other operating expenses rose marginally by 1% to $356.86 million relative to $352.03 million in 2017. For the quarter, other operating expenses went up by 2% closing at $176.70 million (2017: $172.99 million).
Other income climbed to total $67.20 million compared to the 2017 figure of $57.67 million. While for the quarter, other income closed at $44.84 million (2017: $15.69 million).
Operating loss widened by 537% for the period in review, from $14.84 million to $94.45 million in 2018. As for the quarter, operating loss of $45.93 million was recorded relative to an operating profit of $21.42 million.
Finance costs increased 94% year over year to $32.96 million versus $17.01 million in the prior year. While for the quarter, finance cost amounted to $16.09 million (2017: $11.03 million). The Company highlighted that, “this was mainly due to external financing procured for the acquisition of the High Definition Outside Broadcast Unit.”
After incurring taxes of $5.90 million, RJR recorded a net loss of $133.31 million relative to a loss of $35.16 million for the prior year’s corresponding period in 2017. For the quarter, net loss totalled $63.12 million compared to a net profit of $12.14 million.
The loss per share (LPS) for the six-month period amounted to $0.06 versus $0.01 in 2017. For the quarter, LPS of $0.026 was recorded versus an EPS of $0.006 The twelve months trailing loss per share is $0.059. The number of shares used in this calculation was 2,422,487,654 units. RJR stock last traded on November 14, 2018 at $0.95.
Balance Sheet Highlights:
RJR as at September 30, 2018, recorded total assets of $3.76 billion, a decrease of 6% when compared to $4.02 billion for the previous corresponding period.
Total Shareholders’ Equity closed at $2.27 billion, down 10% from $2.52 billion last year. This resulted in a book value of $0.94 (2017: $1.04).
Disclaimer: Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.