RJR Reports Increase in Unaudited Net Profit For Q3 2021

• For the 9 months ending December 31, 2021, RJR reported a net profit attributable to shareholders of $251.80Mn, a 62.60% increase year over year. Additionally this outturn surpassed the pre-pandemic outturn of $134.39Mn. The net profit outturn was primarily supported by revenue growth of 13.6%, with revenues moving from $3.79Bn to $4.31Bn. 
• The company’s performance was influenced by growth in its three divisions: audio, audio-visual, and print and online divisions. The company also highlighted that it surpassed key revenue targets for its digital services, which is a positive as it transitions to a digital company. However, it also realized a 29.4% increase in direct expenses, though this increase was not enough to temper its bottom-line growth. 
• We anticipate that RJR will see further bottom-line growth supported by new initiatives to improve technological efficiencies and increase revenues. This includes its new ecommerce website, Gcommerceja.com, which was developed through its partnership with ePost Caribbean Limited. Further, the company should see earnings growth through the share of income from its associate companies due to its recent acquisitions such as its 15% stake in Starapple Analytics. 
• RJR’s stock price has increased by 18.9% since the start of the calendar year. The stock closed Monday’s trading session at $3.65 and currently trades at a P/E of 30.7x earnings which is above the Main Market average of 18.7x.

(Sources: Company Financials & NCBCM Research)