Feb 2007 Financial News

BS&T Releases First Quarter Results

Feb 23, 2007

Results for the First Quarter Ended December 31, 2006
All figures quoted in Barbados Dollars unless otherwise stated

For the First Quarter Ended December 31, 2006 the Barbados Shipping & Trading Company Limited (BS&T) reported Earnings Per Share (EPS) of $0.18 which was up by 2 cents or 12.50 per cent on the comparable first quarter of FY 2006.

Revenue for the three month period under review amounted to $205.80 million and was up by 8.87 per cent or $16.77 million on the corresponding period in 2005. The Chairman has noted that Group Operating Profit grew by almost 16 per cent to $18.55 million and said that this reflects continued improvement in the Group’s core operations.

For the period under review, Interest Expense amounted to $3.26 million and this was up by a significant 13.62 per cent from $2.87 million in the comparable period last financial year. Other Expenses also rose, moving from $0.14 million in Q1-FY2006 to $0.20 million in Q1-FY2007, an increase of 44.20 per cent.

Profit before Taxation (Parent Company and Subsidiaries) stood at $15.09 million and was up by a noteworthy 15.54 per cent from $13.02 million in Q1-FY2006. The Effective Tax Rate for the period under review was 9.71 per cent compared to a Tax Rate of 9.66 per cent in the corresponding quarter in FY2006. Thus, Profit After Taxation amounted to $14.52 million and was up by 14.95 per cent or $1.89 million on the comparable quarter in FY2006.

Net Income After Tax- Associated Companies showed a small increase of 2.71 per cent (Q1-FY2007 on Q1-FY2006). However, the Chairman has stated that the hotel investments are expected to perform better during the winter season and this will be reflected in the coming quarter.

After deducting Minority Interests of $1.33 million, the Group’s Net Income stood at $13.19 million which reflected an increase of 13.54 per cent on the Net Income of Q1-FY2006.

The Chairman has also announced a change in accounting policy, such that: in accordance with IAS39 (Revised), an unrealized gain of $8.2 million in the quarter under review in respect of Investments Available Sale has been recorded in Capital Reserves and is not reflected in the Income Statement. Thus, the results for Q1-FY2006 have been restated so as to exclude any such unrealized gains or losses.

The shares of BS&T are currently trading at a price of TT$16.75. We have forecasted an EPS for FY2007 of TT$1.56 and with this forecast and the current price, these shares are trading at a price to earnings multiple of 10.74 times, which is fairly low for this conglomerate. Based on fundamental analysis we are estimating a 12 month target price for this share of TT$20.28. This would mean that there is an estimated expected return of 21.07 per cent at the current price of TT$16.75 and as such we strongly recommend a BUY on this share.



Gia Singh
WISE Research Team