• Aided by an expansion in its footprint, which more than doubled topline growth, Regency Petroleum Company Limited (RPL) recorded a net profit of $60.14Mn for the six months ending June 2024, a 77.0% increase relative to the first half of 2023.
• Revenues grew 144.1% year over year to $886.56Mn as the company opened additional service stations, which translated into higher volumes being sold during the period.
• As revenues grew, the cost of sales also increased by 149.2% to $756.53Mn, which resulted in a 118% improvement in gross profit from $59.66Mn to $130.03Mn. However, gross profit margins narrowed to 14.7% from 16.4% as cost of sales outpaced revenue growth.
• Administrative and General Expenses grew 163.9% from $25.24Mn to $66.62Mn, largely due to its new service stations that have resulted in increased staff costs, depreciation charges, and security costs. That being said, operating profit increased 80.1% to $63.82Mn when compared to the $35.44Mn in the prior period.
• The company is continuing its expansion plan with its Spanish Town Road, St. Andrew service station, which is expected to be operational by September. This is following a delay in its Q2 timeline due to the need to settle final invoices related to the project’s cost. Additionally, RPL recently announced the opening of its first franchise location with DW People’s Choice Company Ltd in Whithorn, Westmoreland. The company will provide technical support and the sale of fuel to this service station, which now displays RPL branding.
• RPL’s stock price has decreased by 9.09% since the start of the calendar year. The stock closed Wednesday’s trading session at $2.20 and currently trades at a P/E of 44.0x, which is above the Junior Market Distribution Sector Average of 16.3x, suggesting that the market is already pricing in expectations of future earnings growth given its expansion plans.

(Sources: JSE and NCBCM Research)

• Despite solid revenue growth, higher administrative expenses tempered bottom-line growth for Kingston Wharves Limited( KW). KW reported net profit attributable to owners of $1.35Bn for its six months ended June 2024, representing a 5% (or $58.36Mn) increase relative to last year.
• Over the six months, KW revenues increased by $684.96Mn or 15.5% to $5.11Bnaided by the performances in its two key operational areas- terminal (+4% or $129Mn) and logistic services (+36% or $523Mn).
• Increased revenues from specialized logistics and warehousing operations, and port ancillary services fueled the growth. These areas benefited from capital investments and system improvements aimed at enhancing the functionality of its facilities and the competitiveness and efficiency of its services.
• However, the company’s cost of sales has increased by 16.6% (or $407.80Mn) to $2.87Bn, which weighed on its gross profit margin, which declined from 44.3% in H1 2023 to 43.8% in H1 2024. Similarly, administrative expenses also grew by 8.5% (or $69.30Mn) to $885.98Mn due to higher depreciation charges and expenses associated with the commissioning of key strategic infrastructure projects. These projects are aimed at enhancing the terminal's capacity for increased throughput and ensuring long-term resilience.
• Going forward, KWL plans to continue undertaking initiatives geared towards increased efficiency in its terminal operations, chiefly the demolition and removal of aged on-dock structures and the re-organisation of the terminal space. Management anticipates that this will complement its initiatives to improve customer experience, enhance training of its team, and increase utilization of digital technology.
• KWL’s stock price has increased marginally by 0.9% since the start of the calendar year. The stock closed Wednesday’s trading session at $33.15 and currently trades at a P/E of 12.2x which is above the Main Market Energy, Industrials and Materials Sector Average of 8.7x.

(Sources: JSE and NCBCM Research

• Over the last decade, economic growth in Latin American countries has been weak, averaging 0.9% between 2015 and 2024, which is lower than the 2.0% recorded in the “lost decade” of the 1980s. This was revealed in the Economic Commission for Latin America and the Caribbean’s (ECLAC) annual report, titled 'Economic Survey of Latin America and the Caribbean 2024: Low Growth Trap, Climate Change, and Employment Trends’\.
• The report noted that the region must boost growth to meet the environmental, social and labour challenges it currently faces. This will require the harmonization of macroeconomic and productive development policies that stimulate investment and productivity and facilitate inclusive and sustainable growth.
• Economic growth in the region’s economies remains weak. In the first quarter of 2024, the region’s economy grew by 1.5% relative to the previous year. This was the third consecutive quarter in which the GDP of the Latin American economies increased by less than 2.0% and the sixth quarter in which growth was lower than the 4.5% recorded in the third quarter of 2022.
• For 2024, when including Guyana, the ECLAC projects that the Caribbean region will grow by 8.4% this year. Excluding Guyana ECLAC forecasts 2.6% growth for the Caribbean region. Guyana alone is forecast to experience a remarkable 29.2% growth. Furthermore, low growth is also forecasted for all other subregions, including 1.5% in South America and 2.2% in Central America and Mexico.
• Other country-specific growth forecasts for 2024 include the Dominican Republic (5.2%), Costa Rica (4.0%), Panama (2.7%), Bahamas (2.3%), Barbaods (3.7%), Jamaica (1.8%), and Trinidad and Tobago (2.4%).
• Overall, growth across the Latin American and Caribbean region is expected to average 1.8% in 2024, below 2.2% and 4.0% in 2023 and 2022, respectively. On the contrary, a higher growth rate of 2.3% is expected for the region as a whole in 2025, where the performance of South America is set to be the main driver.
• That said, the region’s economic growth remains conditioned by an uncertain external scenario, given high inflation and interest rates that remain elevated worldwide, which tends to delay the normalization of monetary policy easing in the main advanced countries, depressing external demand and keeping financial conditions tight.

(Source: Economic Commission for Latin America and the Caribbean)

• Although there have been increases in mortgage rates globally, Guyana has stood out for being able to significantly reduce this over the past three years as a result of direct policies implemented by the government, according to President Dr. Irfaan Ali.
• “The government has increased the mortgage interest relief from GYD15Mn to GYD30Mn… to date, approximately close to 17,000 homeowners have benefitted, and the total costs of GYD2.7Bn, more than GYD2.7Bn that was put back directly in the pockets of 17,000,” the Head of State said recently.
• He related that the government negotiated a reduction in interest rates for mortgages by close to 2.5%. “As a result of this policy, we have seen an increase in housing loans by almost 20% or GYD56Bn, and these housing loans have the lowest default rate in this hemisphere,” Dr. Ali said.
• The President emphasised the decades of targeted policies implemented by successive People’s Progressive Party/Civic (PPP/C) governments to promote affordable and sustainable housing to all Guyanese. The government, he said, has confronted previous housing challenges and, over the years, has allocated ownership of land to thousands, established initiatives like the turnkey programme, developed new housing schemes, and regularised several areas.
• Going forward, he added, “Guyanese from all walks of life, can rely on the promise of our government to provide housing at an affordable rate.”

(Source: Guyana Chronicle)

• Underlying US inflation eased for a fourth month on an annual basis in July, keeping the Federal Reserve on track to lower interest rates next month. The so-called core consumer price index — which excludes food and energy costs — increased 3.2% in July from a year ago, still the slowest pace since early 2021. The monthly measure rose 0.2%, a slight pickup from June’s surprisingly low reading, Bureau of Labor Statistics (BLS) figures showed Wednesday.
• Economists see the core gauge as a better indicator of underlying inflation than the overall CPI. That measure also climbed 0.2% from the prior month and 2.9% from a year ago. BLS said nearly 90% of the monthly advance was due to shelter, which accelerated from June. Inflation is still broadly on a downward trend as the economy slowly shifts into a lower gear. Combined with a softening job market, the Fed is widely expected to start lowering interest rates next month, while the size of the cut will likely be determined by more incoming data.
• Before their September meeting, officials will get more inflation readings plus another jobs report — which will be heavily scrutinized after the disappointing July figures helped spark a global market selloff and fanned recession fears. Fed Chair Jerome Powell and his colleagues have recently said they’re focusing more on the labor side of their dual mandate, which they’re likely to stress at their annual symposium in Jackson Hole, Wyoming next week.
• Excluding housing and energy, service prices were up 0.2%, the first increase in three months, but still at a tame pace, according to Bloomberg calculations. While central bankers have stressed the importance of looking at such a metric when assessing the nation’s inflation trajectory, they compute it based on a separate index.
• That measure, known as the personal consumption expenditures price index, doesn’t put as much weight on shelter as the CPI does — and that’s part of the reason why the PCE gauge is trending closer to the Fed’s 2% target. The PCE measure, released later this month, draws from the CPI as well as certain categories within the producer price index. Those parts of the PPI were fairly tame in July, and the headline figures rose by less than forecast, according to government data out Tuesday.

(Source: Bloomberg)

• The European Central Bank will cut its deposit rate twice more this year, in September and December, according to an over-80% majority of economists polled by Reuters, fewer reductions than markets currently expect.
• Since April, economists in Reuters surveys have remained consistent in predicting a total of three cuts this year, including the one already delivered in June. By contrast, interest rate futures are pricing a total of four cuts by end-year.
• An unexpected rise in euro zone inflation in July, near record-low unemployment and still-steady economic activity in the common currency bloc give ECB policymakers cause to be cautious.
• Over 80% of economists, according to a Reuters poll, predicted that the ECB's Governing Council would deliver two more 25 basis point rate cuts this year, in September and December, taking the deposit rate to 3.25%. Importantly, the majority of forecasters looking for two more ECB rate cuts this year has held steady despite financial market volatility earlier this month.
• Euro zone inflation, which unexpectedly rose to 2.6% last month from 2.5% in June, will average 2.4% this year, the poll showed, and not reach the ECB's 2% target until the second half of 2025. That outlook was slightly more optimistic than projections the ECB made in June, but some are bracing for the central bank's staff projections to worsen in September.
• The central bank is expected to reduce the deposit rate four times next year, according to poll medians, reaching 2.25% by end-2025.

(Source: Reuters)

• Productive Business Solutions Limited (PBS) announced that there would be a further delay in the release of its audited consolidated financial statements for the year ended December 31, 2023, pursuant to Rule 408 (iv) of the Jamaica Stock Exchange Main Market Rules.
• PBS now expects to publish its audited consolidated financial statements no later than October 31, 2024.
• The further delay has been caused by additional audit procedures as a result of required restatements of material accounting transactions undertaken by PBS’s subsidiary in Costa Rica, which it expects will mostly impact PBS’s consolidated financial statements in accounting periods prior to 2021.
• In keeping with the JSE’s Main Market Rule 408 (iii) on Audited Annual Financial Statements JSE suspended trading in the shares of Productive Business Solutions Limited (PBS) on July 2, 2024, pending the Company’s submission of its 2023 Audited Financial Statements. The Company’s 2023 Audited Financial Statements became due on March 30, 2024, and were ninety-three (93) days overdue on July 1, 2024.
• PBS’s stock price closed at $1.45 on July 1, 2024, representing a 9.9% decline since the start of the calendar year.

(Sources: JSE and NCBCM Research)

• Sagicor Investments Jamaica Limited has advised of the basis of allotment of shares to successful Applicants in the offer of up to 400,000,000 ordinary shares in the capital of R.A. Williams Distributors Limited.
• The Offer made subject to the Prospectus dated June 19, 2024, closed on July 31, 2024, receiving $420Mn in subscriptions relative to the IPO’s size of $400Mn, a 5% oversubscription.
• The Prospectus outlines two (2) Reserved Share Pools and a Non-Reserved Share Pool. The methodology and allotment of ordinary shares are as follows:
• Applicants in the Company Applicants Reserve Share Pool shall receive full allotment of their subscription.
• Applicants in the Key Strategic Partners Reserve Share Pool shall receive full allotment of their subscription.
• All applicants from the Non-Reserved Share Pool shall receive the first 5,000,000 units plus a pro-rata allocation of approximately 56.01% of the balance in excess of 5,000,000 units.

 (Source: JSE)

• Real estate tourism is rapidly evolving in the Dominican Republic, driven by large-scale projects requiring substantial investments, according to the Dominican Association of Real Estate Tourism Companies (ADETI). Currently, 65 to 70% of projects in the sector are dedicated to real estate tourism, with an additional 10% being mixed-use, including hotels.
• Michael Lugo Risk, Executive Director of ADETI, reported that the association’s members alone are adding approximately 6,000 new rooms in 2024. ADETI comprises around 15 major tourist real estate companies. Lugo highlighted that infrastructure investments in the sector exceed $10Bn, including both new developments and remodeling projects.
• Eduardo Read, President of ADETI, emphasised the association’s commitment to sustainable tourism. He stated that ADETI is fully supporting the “green tourism” initiative, aiming to minimise emissions through the use of electric vehicles and solar energy production.
•  “It’s a cultural shift. Some projects are over 50 years old, making change challenging, especially for large areas spanning 30 to 40 million square meters. However, we are making gradual progress,” Read explained. He also addressed misconceptions about real estate tourism, noting that many constructions are inaccurately labeled as such. “They call any apartment project real estate tourism, but these often lack a master plan,” he said.
• Read stressed that ADETI ensures all its projects include treatment plants and adhere to ecological standards. “We do not permit construction without ecological criteria and sustainability. However, there are buildings with 8 to 20 apartments built without these considerations, purely for sale,” he concluded.

(Source: Dominican Today)

• Services activity in Brazil grew more than expected in June to hit an all-time high, eclipsing a record that had been set in December 2022, data from statistics agency IBGE showed on Tuesday.
• The service sector, which accounts for about 70% of all activity in Latin America's largest economy, grew 1.7% in June from the previous month, exceeding the 0.8% expected by analysts polled by Reuters.
• IBGE said that all five main groups surveyed by the agency posted positive results in the period, with a 1.8% expansion in transportation notably offsetting a negative reading in the previous month. "The result is largely due to air transport, driven by a drop in air ticket prices," IBGE research manager Rodrigo Lobo said.
• Services activity was also up 1.3% in June from a year earlier, according to IBGE, again beating the 0.8% expected by economists in the Reuters poll. The sector now stands 0.5% above the previous record high in the IBGE data series, which had been set in late 2022, the statistics agency added.
• "Our assessment indicates that Brazil's economic activity continues to perform well," said PicPay economist Igor Cadilhac, highlighting a strong labor market. "We expect this scenario to continue throughout the year, despite recent deterioration in inflation and the need to keep interest rates high for longer."
• Brazil's central bank recently flagged greater caution in its monetary policy stance and said it would raise interest rates if needed to control inflation. The country's benchmark interest rate, Selic, currently stands at 10.5%.

(Source: Reuters)