Paramount Trading's Earnings Rebound in Q2 FY25/26

  • Paramount Trading (Jamaica) Limited (PTL) returned to profitability in Q2 FY2026, posting net profit of J$31.11Mn for the quarter ended November 30, 2025, compared with a loss of J$10.79Mn in the corresponding prior-year period. The improved outturn was driven by tighter cost discipline following hurricane-related disruptions in the prior year.
  • Quarterly revenues fell marginally (-3.4%) year-on-year to J$385.7Mn. Management noted that quarterly revenue was adversely impacted by supply chain disruptions in October and depressed demand following Hurricane Melissa.
  • Despite softer revenues, gross profit increased 18.6% YoY to J$157.05Mn, with gross margins expanding to 48.5% from 42.0% in Q2 FY2025. The margin improvement reflects better pricing discipline, more favourable product mix, and lower relative direct costs as volumes normalized, resulting in a14.4% reduction in direct expenses.
  • Operating profit (EBIT) improved sharply to J$63.36Mn, up from J$10.95Mn in the prior-year quarter driven by lower selling & distribution down 65.54%. Net finance costs declined to J$21.48Mn from J$21.75Mn, reflecting slightly lower principal balances on loans.
  • On a six-month basis (6M FY2026), PTL reported net profit of J$86.40Mn, a sharp improvement from a loss of J$48.74Mn in the prior-year period. The stronger year-to-date performance was largely driven by the robust Q2 recovery, which more than offset a softer Q1.
  • Looking ahead, Management’s renewed focus on pricing discipline, product mix optimisation and cost containment should help sustain improved margins, even if top-line growth remains modest in the near term owing to the disruption of Hurricane Melissa. While demand conditions may remain uneven, the company’s return to profitability in Q2 provides a stronger earnings base for the remainder of FY2026, supporting a cautiously improving outlook.
  • As at the close of trading on Thursday, PTL’s stock price closed at J$1.43, reflecting a 13.5% year-to-date increase. At this closing price, it holds a P/E ratio of 13.6x below the Junior Market Distribution sector average of 16.0x.

(Sources: PTL Financial Statements & NCBCM Research)