Opinions
Peter Hodson
Rogers Sugar Inc
RSI-T
COMMENT
May 06, 2016
Stock price when the opinion was issued
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EPS of 15c beat estimates of 12C. Revenue of $261M beat estimates of $246M.
EBITDA of $33.5M beat estimates of $28.9M.
Sales volume guidance was increased, with strong sugar demand and pricing.
The Maple segment is expected to do better as unfavourable conditions of last year subside.
These earnings are solid.
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RSI beat EPS estimates of 13c coming in at 14c. Revenue also beat estimates of $304.7M coming in at $333.03M increasing 10% year-over-year. Adjusted EBITDA was $141.6M up 28% year-over-year. The quarterly and full-year results look solid, with increasing sales driven by price increases and volume growth. The sales volume expectation for sugar in FY2025 is set at 800,000 metric tonnes. The sales volume for maple is expected to grow moderately by 0.5M pounds. We think the earnings were solid and RSI continues to be an OK value/income stock.
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This went to sleep for about 3 years. Volumes had declined and costs went up. It was a situation where you couldn’t see any growth. Suddenly they turned this around over the past 3 quarters. The last quarter was quite good. Volumes went up and costs went down giving a double impact of better margins with higher volumes. There are some risks because it is cyclical. 6.57% dividend yield which is sustainable. For an income stock it is pretty solid. He wouldn’t expect the same kind of gains that we have had over the past 6-9 months, but a decent little company.