Revenue Analysis
Total and Operating Revenue: TT’s operating revenue showed a consistent increase across the observed quarters, starting from \$3.67 billion in 2023-03 to \$4.88 billion in 2023-09. The operating revenue for the latest quarter in 2024-03 dipped slightly to \$4.22 billion, possibly indicating a normalization or market adjustment.
Gross Profit Margin: Gross profit followed a similar upward trend, peaking at \$1.66 billion in 2023-09 from \$1.14 billion in 2023-03. The 2024-03 gross profit decreased to approximately \$1.46 billion. The Gross Profit Margin percentage has slightly decreased over the period, which needs to be monitored for potential issues in cost efficiency or pricing strategies.
Cost Management
Cost of Revenue: The cost of revenue escalated from \$2.52 billion in 2023-03 to \$3.23 billion by 2023-09, before slightly decreasing to \$2.76 billion by 2024-03. Monitoring this decrease is crucial, as it impacts the cost management strategies of TT.
Operating Expense and Total Expenses: Operating expenses and total expenses trend similarly, displaying a peak in 2023-09 and a slight reduction in 2024-03. This data suggests a correlation with revenue changes, indicating variable costs could be a significant portion of expenditures.
Profitability Analysis
EBITDA, Operating, and Pretax Income: EBITDA started at \$527 million in 2023-03 and peaked at \$946 million in 2023-09. Following this, EBITDA was maintained at about \$714 million in 2024-03. Operating and pretax incomes have displayed similar trends, peaking in 2023-09. This suggests that quarters with higher revenue not only cover costs but also enhance profitability.
Net Income Metrics: Net income has generally followed the trend of other profitability metrics, indicating overall healthy financial performance, despite minor fluctuations.
Cash Flow Indicators
Reconciled Depreciation: Gradual increases in reconciled depreciation from \$79.8 million in 2023-03 to \$92 million in 2023-09 with a small decrease to \$91.5 million by 2024-03 suggest ongoing investments in assets that could imply future productive capacity expansion.
Taxation
Tax Rate and Provisions: The tax rate fluctuated but generally rose from 18.8% to around 19.2%, reaching a high of 22.1% in 2023-06. Provision for taxes reflects these changes, with corresponding increases and decreases seen across the quarters.
Tax Effects of Unusual Items: The effect of unusual tax items appears modest but must be factored into net adjustments for a clearer picture of net earnings.
Shareholder Metrics
Earnings Per Share (EPS): The EPS showed significant improvement from 1.33 in 2023-03 to 2.72 in 2023-09. Despite a minor reduction to 2.19 in 2023-12, the upward trend in EPS is a positive indicator for shareholder returns.
Average Shares Outstanding: There appears to be a slight increase in average shares outstanding, which could dilute individual share value. However, the rise in net income covers this dilution and supports strong per-share earnings.
Conclusion
The trend analysis of TT’s financial performance over the last 3 years provides a predominantly positive outlook, with significant improvements in revenues, net income, and EPS. While there are areas requiring attention such as fluctuating tax rates and cost management, the overall health of TT appears robust, supporting continued investment.
Appendices
Supporting data tables and detailed calculations are utilised internally for generating these analytical views and are ready for regulatory compliance and detailed financial review as required.