Paramount Trading Jamaica Limited saw its profit significantly reduced for the second quarter ended November 30, 2020, to JM$4.5 million when compared to JM$24.9 million for the corresponding period in 2019.
Net profit for the half-year was JM$19.7 million, almost 50 per cent less than JM$39.5 million reported in 2019.
For the second quarter, gross revenue dropped to JM$306.6 million, representing a 25 per cent decline compared to the prior year’s JM$407.6 million, according to a report to shareholders. Gross profit for the quarter fell to JM$100 million compared to JM$124.7 million the year before.
“The 25 per cent in gross sales produced a 20 per cent decline in gross profit,” Chairman Radcliff Knibbs wrote in the report to shareholders. However, he pointed out that there was an improvement in gross profit margin because of increased sales of higher-priced products.
Paramaount realised a gross margin of 36 per cent compared to 30 per cent for the similar period in 2019.
Operating expenses of JM$91 million for the second quarter was nine per cent less than JM$100 million the year before. Finance expenses of JM$12.7 million indicated an increase of JM$3.1 million as a result of long-term liabilities.
For the six-month period, revenue of JM$668.6 million was JM$99.6 million less than that of the year before.
At the same time, other operating income showed a reduction of 55 per cent, from JM$22.9 million in 2019 to JM$12.7 million in the period under review.
“Although we managed and reduced our operating expenses for the quarter, lower revenues led to [a] net profit of [JM]$4.5 million compared to prior year [JM]$24.9 million,” Knibbs explained.
On the other hand, six-month operating expenses of JM$182 million contracted by five per cent year over year.
“We continue to benefit from our efforts at cost rationalisation and restructuring,” Radlciffe stated.
We have adapted to the circumstances and will continue to be proactive in the measures taken to combat its impact on our operations.”
Notwithstanding, Paramount’s finance cost for the six months reached JM$25.8 million, a 31 per cent increase over the JM$19.7 million incurred in 2019, due to the interest cost associated with an increase in long term liabilities.
Still, the chairman acknowledged that, “Over the past six months, Paramount, like most companies, has experienced unprecedented challenges to our business as a result of the novel COVID-19 pandemic. We have adapted to the circumstances and will continue to be proactive in the measures taken to combat its impact on our operations.”
He added, “We continue to pursue our strategic growth while maintaining the operational framework which was developed for the protection of staff, customers and other stakeholders.”
“We will continue pivoting our operations to maximise on any possible gains we may derive during this period of crisis. We expect that our strategic objectives will be realised through strong income and cost containment.”
EPS year to date was $0.013, declining compared to $0.026 the year before.