Lumber and Blue Power See Lower Earnings For Their Respective First Quarters
- For the first quarter that ended July 31, 2022, both Lumber and Blue Power saw a fall in their respective bottom lines. Lumber saw a decline of 32.7%, while Blue Power saw a decline of 85.1%.
- Lumber’s financial performance was attributed to a 4% decline in its revenues owing to its customer base reacting to uncertain economic conditions, including high-interest rates and a spike in commodity prices for certain key hardware items.
- Meanwhile, though Blue Power saw an 84% increase in its revenues owing to an increase in sales for all its main product categories, its overall profitability was adversely affected by disruptions to its supply chain and the increase in raw material prices.
- Going forward, the outlook for both companies is uncertain as the factors that adversely impacted their financial performances are expected to remain in the near term. Consequently, both companies could underperform in their subsequent quarters for the remainder of 2022.
- Lumber’s stock price has decreased by 3.1% since the start of the calendar year. The stock closed Wednesday’s trading session at $2.93 and currently trades at a P/E of 12.7x which is below the Junior Market Distribution Sector Average of 18.5x. Meanwhile, Blue Power’s stock price has increased by 19.2% since the start of the calendar year. The stock closed Wednesday’s trading session at $3.75 and currently trades at a P/E of 13.9x which is below the Junior Market Manufacturing Sector Average of 16.7x.
(Source: JSE and NCBCM Research)