NEL in bloom, JMMB perks up but FCIB income dips

National Enterprises Limited Revision of Earnings Estimate for the year ended March 31, 2003

In light of the higher than expected results for the year ended December 31, 2002 from National Flour Mills and the reported 18% increase in Telecommunications Services of Trinidad and Tobago (TSTT) results for the year ended March 31, 2003 we have revised upwards our forecast for National Enterprises Limited (NEL) for the year ended March 31, 2003. NEL had estimated that TSTT would contribute $196.912 million for the year ended March 31, 2003; the actual figure would be $223.900 million.  National Flour Mills contribution was estimated at $11.269 million while the actual figure was $18.223 million.  When we take into account these increases we have revised our earnings per share estimate to 53 cents per share up from the 46 cents per share in the forecast.  We have also revised our dividend estimate to 30 cents per share up from the previous estimate of 27 cents per share.

We believe this is achievable and the forecast for the year ended March 31, 2004 would also be surpassed.  This assertion is based on the fact that TSTT is expected to continue to perform well especially as the advent of new competition is still not on the horizon. Another compelling factor is higher ammonia prices which have gone from US$147.61 a metric tonne at the end of 2002 to a peak of US$243.2 million at the end of March 2003.  The price has since receded and is presently trading in a band between US$180 and US$200 a metric tonne.  Thus we reiterate our buy recommendation on this share.

First Caribbean International Bank Results for the period ended April 30, 2003.  All amounts in Bds $.

The results of First Caribbean International Bank (FCIB) for the period ended April 30, 2003 are compared with pro-forma results of the combined entity of Barclays and CIBC had it existed in the prior period in 2002.  Total income declined by 3.9 per cent to Bds$368.2 million in 2003 compared to the Bds$383.3 million in the previous period in 2002. Operating profit was down 17.1 per cent at Bds$94.2 million in 2003 versus Bds$113.6 million in the prior period in 2002.  Net income showed a decline of 33.4 per cent to Bds$66.7 million in 2003 against Bds$100.1 million in the similar period in 2002.  The Chairman pointed to the decline in interest rates in the US as the main cause of the decline in net-interest income.  Conversely, higher fees in foreign exchange and capital markets combined with reductions in non-interest expenses led to increased non-interest income.   He also stated that net income would have increased 2.0 per cent with the exclusion of goodwill and integration costs. 

We draw attention to these same items, and point out that integration costs and goodwill shall continue to impact FCIB’s results for several years.  Earnings per share reached Bds4.3 cents in 2003 down from the Bds6.7 cents posted in 2002.  An interim dividend of Bds2.5 cents has been declared, payable on July 11, 2003 to registered members as at June 16, 2003.  Based on these results we are projecting a full-year EPS of TT30 cents and a dividend payout of 15 cents.   

Jamaica Money Market Brokers Results for the year ended February 28, 2003. All amounts in J’can $.

In the year ended February 28, 2003 Jamaica Money Market Brokers (JMMB) achieved an increase in gross income of 52.5 per cent to JA$1.54 billion.  Operating profit increased 28.6 per cent to JA$710.7 million, while pre-tax earnings were 76.0 per cent higher at JA$944.2 million.  Profit attributable to shareholders reached JA$900.5 million in 2003, a 64.0 per cent increase over the similar period in 2002.  Earnings per share in 2003 was 61.5 cents compared to 37.5 cents in 2002.  We await further details.

Major Advances
Furness up 32 cents (+9.47 per cent)
National Enterprises up 15 cents
(+3.03 per cent)
Grace Kennedy & Co. up 3 cents
 (+0.66 per cent)

Major Declines
Trinidad Cement down 30 cents
(-5.62 per cent)
Readymix down 10 cents (-1.47 per cent)

Analysis by West Indies Stockbrokers Limited, 23a Chacon Street, Port of Spain, Trinidad (868) 623-4861 Fax (868)-627-5002
e-mail: wise@carib-link.net. Member of the Trinidad and Tobago Stock Exchange Ltd.