Blue Power’s Bottom-Line Supported by Disposals

• Despite a 20.4% reduction in revenues, Blue Power reported a 146.4% or $121.41Mn increase in earnings for the nine months ended January 31, 2021. The fall in the company’s revenues can be attributed to a reduction in exports as a result of the discontinuation of sales to CARICOM markets arising from a changed trade regime. In 2021, the Jamaican Government discontinued the issuance of Certificates of Origin for soap manufactured locally with imported soap noodles, as a result of a ruling made in 2020 by CARICOM’s Council for Trade and Economic Development (COTED). 
• However, the company’s bottom-line benefited from capital gains from the sale of real estate and investments during this period of $145.64Mn. Consequently, profit before tax totalled $215.12Mn for the nine months relative to $110.6Mn for the previous year, up 94.6%. 
• In the coming months, management has indicated that the company will be taking steps to adjust its prices in response to the rising commodity prices and freight rates. The increases in input cost no longer appear to be temporary, and as such, Blue Power will be adjusting prices to reflect the changes in the economic environment. As such the company may see an increase in its revenue as a result of charging higher prices for its products.
• Blue Power’s stock price has increased by 23.3% since the start of the calendar year. The stock closed Tuesday’s trading session at $3.88 and currently trades at a P/E of 9.7x earnings which is below the Junior Market Manufacturing Sector Average of 19.7x.

(Source: Company Financials)