RJR’s Profit Benefits from 1834 Amalgamation
- Radio Jamaica Limited (RJR) recorded a net profit of $381.38Mn for the third quarter that ended December 31, 2022, representing a 252.8% y-o-y increase in profitability. Additionally, the company’s bottom line for the nine months increased by 34.0% to $329.1Mn when compared to the same period in 2021. This result was bolstered mainly by a Bargain Purchase Gain of $434Mn arising from the amalgamation of RJR and 1834 Investments.
- Revenues for the quarter declined by 0.2% yoy to $1.45Bn due mainly to decreases in the Audio/Visual division of $18Mn (-2.9%) and in the Audio division of $4Mn (-1.7%), which was offset by an increase of $19Mn (3.1%) in the Print and Online Division. The nine-month reported revenue was $4.19Bn representing a 2.8% decline relative to the nine months ending December 2021. The Group continued to experience softness in the overall advertising market as businesses continued to be impacted by challenging global and local economic conditions.
- Administrative and selling expenses for the nine months totalled $1.85Bn or 2.2% more than the $1.81Bn for the corresponding period of 2021. Admin costs were higher largely due to increased depreciation charges relating to infrastructure upgrades, 1834 operating costs for December 2022 and one-off consultancy costs. Elevated sales costs resulted from higher distribution-related costs.
- RJR stock price has decreased by 18.4% since the start of the calendar year. The stock closed Tuesday’s trading session at $1.89 and currently trades at a P/E of 12.9x, which is above the Main Market average of 12.2x.
- RJR has been making continued progress in its digital transformation. The Broadcast division has installed new NextGen TV transmission in Kingston and St. James and continues to expand Over The Air coverage islandwide for the proper functioning of HD TV services. This will improve the quality of their content, making RJR the preferred choice for audio/visual, print, and online services, ultimately driving revenues.
(Sources: JSE & NCBCM Research)