RJR Group’s Bottom-Line Improves Due to Cost Reduction Initiatives

• Owing to lower costs, for its financial year ending March 2021, the RJR Communications Group reported a 354.4% increase in net profit to $170.66Mn (EPS: $0.07). 
• Due to cost cutting initiatives, direct, selling and other operating expenses fell by 11.6% (or $298.98Mn), 19.2% (or $164.17Mn) and 32.7% (or $299.80Mn), respectively. During the year there was a reduction in newsprint usage, programming and salary costs, directly related to adjustments made in response to reduced revenues, and other cost containment measures pursued. Additionally, the company reduced expenditure on special events and other expenses that normally went towards boosting sales effort. 
• For the year, the company’s revenues declined by 7.2% (or $400.30Mn) to $5.19Bn, driven by reductions in sales from the audio ($32.00Mn or 4.0%) and print division ($529.00Mn or 19%). Nevertheless, there was an increase in sales from the audio/visual division which grew by $162.00Mn (or 7.0%), but it was not enough to offset the contraction from the print division. The increase in revenues from the audio/visual division was attributed to collaborations with the Ministry of Health and Education, along with the staging of general elections during the year. 
• RJR’s stock price has depreciated by 1.2% since the start of the year to $1.69, and currently trades at a P/E of 24.1x earnings which is above the main market sector average of 20.5x earnings.

(Source: Company Financials)