Plipdeco investment income declines, Sagicor shares ‘fully valued’

Point Lisas Industrial Port Development Corporation Limited Results for the six months Ended June 30, 2003

‘PLIPDECO’s turnover for the six months ended June 30, 2003 reached $72.469 million, an increase of 8.11% over the 2002 figure of $67.030 million.  Fair value gains declined by 5.47%  moving from $2.888 million in 2002 to $2.730 million in 2003. Operating profit increased by 19.95% moving from $21.543 million in 2002 to $25.841 million in 2003. As a result of greater efficiencies, operating margins actually increased from 30.81%  in 2002 to 34.36 %  in 2003. 

Investment income declined by 51.77% moving from $2.320 million in 2002 to $1.119 million in 2003.  Finance cost increased by 81.10 %  moving from $7.009 million in 2002 to $12.693 million in 2003. This increase was due to the finance costs associated with the Berth V project.  Profit after tax declined by 21.42 %  moving from $14.437 million in 2002 to $11.344 million in 2003. In the second half the Group expects to commission a recently acquired mobile harbour crane and a ship to shore gantry crane.  This is expected to impact positively on the Group’s end of year performance because of the tax allowances that these acquisitions would generate and the additional cargo-handling throughput expected from increased utilisation of the new facilities.

We believe the Group would achieve its profit after tax forecast for 2003 of $ 23.854 million set out in the Information Memorandum for its recently completed Rights Issue. This translates to earnings per share of 75 cents  (based on the weighted average capital for the year).   On the capital after the rights issue the estimated earnings is 60 cents per share. Thus at the current price of $10.05 the share is trading at a PE of 16.75 based on the capital after the rights issue.  Thus we believe this share is fully valued and recommend it to investors with a long term horizons. The Board of Directors have recommended an interim dividend of 10 cents per share which would be paid on October 10, 2003 to all Shareholders on the Register as at September 18, 2003.

Sagicor Financial Corporation
Results for the six months
ended June 30, 2003
ALL FIGURES IN BDS$

This is Sagicor’s first year as a public company and as such there is no meaningful comparison except for the forecast given in the Prospectus for the Initial Public Offering (IPO) in December 2002. For the six months ended June 30, 2003 the Group has earned $369.4 million, representing 49.60 %  of the amount forecast in the Prospectus for the IPO.  Policyholder’s benefits and expenses were $334.2 million which was 50.4 %  of the forecast.
This includes $10 million in re-organization cost; the Chairman has indicated this would only cost $1 million in the second half.  Profit from operations amounted to $35.2 million while the net profit achieved was $19.8 million.  The earnings per share achieved for the period was 7.62 cents.

The Chairman has indicated the Group remained confident that it would meet its 2003 forecast of 20.99 cents.  Other than the normal operations in the second half the Group should also benefit from the sale of its banking subsidiary, The Mutual Bank.  Also the benefits from the start up of Sagicor General should also begin to accrue. The economy and stock market in Trinidad and Tobago remains buoyant which augurs well for the Group.  We believe the main issues with this Group are the full integration of Life of Barbados and the performance of the Jamaican operations. Given the 2003 forecast of 20.99 cents per share and the present price of $2.90 the PE Ratio is 13.82.  Thus this share is fully valued.  Analysis by West Indies Stockbrokers Limited. Member of the Trinidad and Tobago Stock Exchange Ltd.