This week, we highlight the results of two media companies and a non-bank financial institution, which all have a December year-end.
Guardian Media Ltd:
One Caribbean Media Ltd:
Though still just below its peak of $512.6 million achieved in 2008, One Caribbean Media Ltd delivered revenues of $494.6 million for fiscal 2012. This result was a healthy improvement of 9.8 per cent over the $450.6 million recorded for 2011. More importantly, gross profit expanded by a healthy 14.5 per cent to reach $177.6 million from the $155.1 million earned in 2011.
Administrative expenses grew by 18.4 per cent to $73.8 million from 2011's $62.3 million. In addition, marketing expenses rose to $4.13 million from 2011's $3.68 million, or by 12.1 per cent. These changes saw operating profit improve by more than $10.6 million or from $89.1 million in 2011 to $99.7 million last year; this reflects a margin increase of 11.9 per cent.
These results reflect the much improved contributions from the Trinidad-based operations. During 2012, OCM acquired Citadel Group for $50.4 million; this company added three radio frequencies to its arsenal of media platforms. Also acquired during 2012 was Sidewalk Radio Ltd, which facilitates the broadcast of Caribbean Super Station (CSS) in T&T. The cost for Sidewalk was $3.3 million. OCM also paid $24.1 million to buy VL Ltd, which is a wholesale distributor of appliances.
OCM's Trinidad operations delivered revenues of $325.8 million (2011: $275.7 million) and operating profits of $75.1 million (2011: $64.7 million). The Barbados operations were more challenged. They produced lower revenue, but delivered an almost equal level of profit. In financial terms, the Barbados units saw revenues in 2012 of $168.9 million (2011: $174.9 million) and operating profit of $24.6 million (2011: $24.5 million).
Resulting from the 2012 acquisitions, OCM's intangible assets increased to almost $62 million from only $315k in 2011. Other assets showing a notable increase was plant, property and equipment. This line item increased to $255.1 million from $242.9 million in 2011. The deferred programming balance rose from $19.2 million in 2011 to $31.3 million last year.
A notable asset, which declined in value, was cash and cash equivalents. This balance fell to $150 million from 2011's figure of $194.3 million. No doubt, acquisition costs, which consumed more than $71 million, were largely responsible for this decline.
In aggregate, the company saw its assets grow to $731.1 million from the $661.4 million it held as at December 2011; this represents an increase of 10 per cent. Of this total, $604.9 million or 82.7 per cent is represented by equity.
Overall, OCM achieved earnings per share (inclusive of employee share ownership plan shares) of $1.11 for 2012; this reflected an improvement of 6 cents per share over the $1.05 delivered for 2011. On the basis of this improved performance, the directors approved total dividends of $0.70, which was 2 cents more than the $0.68 paid for 2011.
In the first quarter of 2013, OCM delivered very strong increases in revenue, profits and earnings per share. These healthy results were largely driven by one-off events relating to the Tobago House of Assembly election and Barbados general election.
Revenues rose to $124 million from $100.5 million in the comparative quarter in 2012. Meanwhile, gross profit increased by 46.6 per cent to reach $44.1 million from last period's $30.1 million. In a similar vein, profit from continuing operations expanded from its 2012 base of $12.8 million to reach $18.1 million, reflecting an improvement of 41.3 per cent.
These changes saw earnings per share (inclusive of ESOP shares) climb by a robust 52.6 per cent to $0.27 from last period's $0.19.
On a sobering note, currency translations differences of $1.25 million combined with unrecognised actuarial losses of $5 million pulled down its comprehensive profit to a more modest $11.9 million; this compares with the $12.7 million reported for the January to March period in 2012.
Looking forward on the local scene, we are likely to see increased media spending in the last two quarters of this year. This is because at least one by-election and the local government elections are likely to be held within that timeframe. These expressions of democracy would benefit all media companies.
ANSA Merchant Bank Ltd:
The assets of ANSA Merchant Bank Ltd grew by 1.5 per cent to reach $5.53 billion as at the end of 2012; in 2011, this balance was $5.45 billion. Even with this modest increase in total assets, shareholders' equity rose by 5.5 per cent to close at $1.53 billion at the end of 2012; this is an improvement over the figure of $1.45 billion at year-end 2011. At December 2012, equity represented 27.6 per cent of AMBL's total assets.
Both total income and total expenses rose in the 2012 period. Income increased by 13.5 per cent to reach $747.2 million from last period's $658.6 million.
Total expenses rose disproportionately by a factor of almost 30 per cent to end at $557.3 million from $428.9 million recorded for 2011. The increase in expenses was attributable to increased provisions in both the company's investment and lending portfolios.
These increased provisions resulted in the company recording a profit attributable to shareholders of $149.6 million versus the $183.6 million earned for 2011. This translated into earnings per share figure of $1.75 (2011: $2.18). The dividend payment of $0.85 was stable for both 2011 and 2012.
Let us look at how the various profit centres did for the relevant periods. The general insurance unit of TATIL had the distinction of being the only division to record a year-on-year improvement in profit. In 2011, this division contributed $69.7 million while, for 2012, this figure rose by a strong 25.4 per cent to $87.4 million.
As the sale and prices of new cars rose, this division would have benefited from higher first-year premiums and a lower incidence of claims. With only 14 per cent of the group's assets, TATIL General contributed 46 per cent to the group's pre-tax profit.
Even though TATIL Life recorded a 24.5 per cent revenue improvement to $207.4 million, pre-tax profit contracted by almost $7 million to end at $20.3 million; in 2011, this figure was $27.3 million.
The banking division would have suffered from increased provisions relating to its lending activities. In terms of revenue, this is the largest division.
This unit's operating income rose to $296.4 million from 2011's $272.3 million, or by 8.9 per cent. Profit, on the other hand, fell by almost 22 per cent to $117.9 million from $151 million in the previous period. This segment has identifiable assets of $2.76 billion, accounting for almost 50 per cent of total group assets.
Bringing up the rear was the mutual funds section, which saw it pre-tax profit slip from a paper-thin result of only $562k in 2011 to a loss of $12.5 million last year. No doubt, much of this loss was related to higher provisioning on investment assets referred to in the chairman's report.
On March 27, 2013, it was announced that AMBL agreed to buy the Barbados-based Consolidated Finance Company Ltd for Bds$53 million.
When all regulatory approvals have been received, this new acquisition would begin to positively impact AMBL's profits.