Opinions
Michael Simpson, CFA
Rogers Sugar Inc
RSI-T
DON'T BUY
Jul 04, 2019
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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There are two players in Sugar. It is such a slow growing industry that this one diversified into maple syrup and due to teething problems, their debt went up. He does not own it because of the debt.