Carreras earnings jump

Sunday, February 16, 2014    

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CARRERAS' net profit jumped 83 per cent during the last quarter of 2013.

The cigarette company's bottom line increased from $1.2 billion during the three months to December 31, 2012, to $2.2 billion during the quarter under review.

Revenue fell from $3.74 billion to $3.66 billion over the periods, but gross profit climbed from $1.7 billion to $1.75 billion.

Importantly, the cigarette distributor's other income stream jumped to $1.8 billion during the quarter, up from $476 million during the comparative period in 2012, although Carreras didn't say what the increase was attributed to.

True to its aggressive dividend policy, the company last week announced its decision to pay shareholders $786 million in dividends next month, following a $573 million special cash distribution three weeks ago.

Shareholders on record as at February 20, will receive a $1.62-a-share interim payment on March 13.

The combined payout this quarter will exceed the $1.26 billion the company distributed to shareholders during the first three months of 2013.

Over the last few years, Carreras has maintained an aggressive dividend policy, whereby it pays shareholders close to the equivalent of the net profit made in the previous quarter.

For instance, the company paid out $485.4 million in the last quarter of 2013 following a $485.8 million net profit for the September quarter, much like the dividend payment and profit in the previous quarter.

Similarly, during the three months to June 30 last year, it paid out $1.08 billion in dividends following a $1.4 billion profit in the January to March quarter of 2013. Albeit, that dividend payment reduced the company's capital base from $3.7 billion at the end of March 2013 to $3.1 billion at the end of June, given that Carreras's profit declined during the end-June quarter.

The cigarette distributor has been experiencing a fall- off in sales since a public smoking ban was implemented last July, and its profit has been squeezed for that reason.

What's more, the share price on the Jamaica Stock Exchange has been trending downwards since last June, when it traded at its 52-week high of $61.

Last Friday, the stock closed at $35 a share, up by a dollar since Carreras announced the new dividend payout.





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