Evaluation of the Performance of Blue Island Public Company Before and After March 15th of 2012

I Financial Markets and Institutions-

Summer 2014

Assessed Coursework:

Evaluation of the performance of Blue Island Public Company before and after March 15th of 2012

For the purpose of this course assignment, I chose to evaluate the Blue Island Public Company. The company was established in 1993 (under the name Blue Island Fish Farming Ltd) as a mariculture unit and it has converted into a Public Company listed in the Cyprus Stock Exchange in 1999.

The basic objective of the work of the company is the production of Mediterranean fish and the trade in fresh fish from open sea fishing.

The basic trading sectors of Blue Island are the following:

• Retail Sector: Sales through its one network of fish markets and shops in supermarket chains throughout the island.
• Wholesale Sector: Supply of products to other fish markets and seafood shops throughout Cyprus.
• Sale to Catering units Sector: Supply of fish to hotels and restaurants throughout the island.
• Export: Fish export from its own breeding farm and other Mediterranean fish such as tuna, sword fish etc to European countries, the United States and the Middle East, and
• Sector for the sale of fry, though its subsidiary Blue Fisheries LTD to fish farms in Cyprus and abroad.

The company supplies from its own production and from fishing companies and other suppliers in Cyprus the Mediterranean and other countries the following products:

Fresh Sea bass and Sea bream of maricultre, frozen whole Sea bass and Sea bream and fillet, under the trade mark Frio Mare, Coastal and Open Sea fishing, such as Read Mullet, Sea Bream, Bogue, Whitebait, Grouper, Cod fish, Tuna, Swordfish etc, Octopus, Squids and Cuttlefish, Prawns, Lobsters, Crabs and Scampi, Mussels, Oysters, Clams, Cockles Scallops etc, Salmon, Trout, Perch etc, Sea bass fry and Sea bream fry.

To evaluate the performance of Blue Island Public Company before and after the 15th of March 2013, I will analyze some of the most important performance indicators of the company. These indicators consist of the movement of stock prices from 15/3/2012 till 14/3/2014, the sales, the earning and some crucial ratios for the year 2012 and 2013. To do this analysis I collected data from the official web site of the company (www.blue-island.com.cy) and from the Cyprus stock exchange web site (www.stockwatch.com.cy).

Firstly I will discuss the movement of the company’s stock price during the concerning period. According to the diagram in the appendix 1 (Historical prices of Blue Island Public Co), the closing price of the company’s stock as at 15 of March 2012 was 0,213 cents per share. Then we can see small fluctuations in the price of the stock during 2012 reaching nearly the same amount in October of 2012 (0,209 3/10/2012). In March of 2013 the stock price fell to 0,145 cents per share (decrease of 32%). Since then it began a gradual decline of the stock price reaching the lowest amount in November of 2013 (0, 10 cents per share). After that the stock price increased by 0,005 cents for a few days and then it felt again to 0, 08 cents in February of 2014. Then it increased to 0,123 cents in March of 2014, which is 42% lower than the starting price of the period (15/3/2012). These movements in the stock price are due to the demand and supply of the company’s shares. This reduction in the stock price is probably due to the financial crisis happened in Cyprus which affected the sales of the firm’s products due to the reduced purchase power of the inland buyers.  

Next, I will analyze some important figures of the comprehensive income statement of the company (see appendix 2) for 2013 compared to 2012 and 2012 compared to 2011. These figures are company’s sales, earnings and earnings per share. The sales of the company felt in 2013 by €375.899 (decrease of 2, 56%) compared to 2012 and €804.195 in 2012 (decrease of 5, 20%) compared to 2011. In contrary the cost of sales for 2013 was increased by €33.246 (0, 37%) compared to 2012 and for 2012 it decreased by €866,961 (8, 8%) compared to 2011. In 2012 the company had an increase in selling and distribution expenses, administrative and finance expenses but also an increase in finance income and decrease in tax expenses. All these lead to fully diluted earnings per share 2, 61 cents for 2012 compared to 3, 70 in 2011. Comparing 2013 and 2012, in 2013 there was an increase in other operating expenses, financial costs, taxes and decrease in finance income. All these had as consequence for the company to have €42.147 loss in 2013 compared to €402.621 profit in 2012 and resulted to basic and fully diluted loss share 0,27 cents per for 2013.