138SL booked 89% Decline in Nine Months Net Profit

Date: August 15, 2018

138 Student Living (138SL), for the nine months ended June 30, 2018, Revenue increased by 54% to $617.40 million relative to the $402.18 million recorded for the corresponding nine months period the prior year. Other operating income also increased for the period under review, growing 21% to $26.77 million relative to $22.10 a year earlier. Revenue for the second quarter rose 34% to $205.50 million (2017: $153.22 million), while other operating income climbed 27% to $10.90 million (2017: $8.57 million). The company mentioned that, “Revenue continues to be less than optimum as the rental rates granted for rooms at Irvine Hall under the second concession continue to be less than that contemplated in the Financial Model forming a part of that Concession; a matter that is under discussion with the University of the West Indies, the Grantor of the Concession.”

Administrative expenses increased by 79% amounting to $334.25 million (2017: $186.47 million). As for the quarter, there was an 84% increase to $130.83 million (2017: $71.24 million). Operating profit amounted to $309.92 million, an increase of 30% compared to $237.81 million that was reported for the comparative period the year prior. While for the third quarter, operating profit closed at $85.57 million (2017: $90.56 million), indicating a 6% decline year over year.

The company also reported finance cost of $329.96 million (2017: $223.33 million) a 48% increase year on year. For the quarter, finance cost went up by 20% to close at $101.50 million (2017: $84.38 million).

Losses before taxation for the nine months period amounted to $20.04 million compared with the profit of $14.48 million for similar period last year. Following tax credits of $23.33 million (2017 tax credit: $16.01 million), Net profit totalled $3.30 million, compared to a profit of $30.48 million recorded in 2017, representing a dip of 89% in Net Profit. Net Profit for the third quarter amounted to $180,000 relative to a Net Profit of $3.70 million.

Earnings per share (EPS) for the period amounted to $0.01 relative to earnings per share of $0.07 a year earlier. The EPS for the quarter totalled $0.0004 in contrast to an EPS of $0.009. The twelve-month trailing EPS $0.10. The number of shares used in this calculation was 414,500,000. As at August 15, 2018, the stock traded at $4.01.

The company stated that, “The issues under discussion with the University are therefore critical not only to the financial performance of 138SL Restoration but to the overall performance of the Group.”

Balance Sheet at a Glance:

As at June 30, 2018, total assets increased by 15% to $8.16 billion (2017: $7.11 billion). This increase was primarily driven by a 65% increase in financial asset-service concession to $7.28 billion (2017: $4.40 billion). Receivables also contributed to the increase with a 166% growth to $362.20 million relative to $136.01 million recorded twelve months earlier. Cash and Cash equivalents rose to $40.66 million in 2018 from $7.76 million in 2017.

Shareholders’ equity totalled $2.73 billion (2017: $2.11 billion) which resulted in a book value per share of $6.59 (2017: $5.09).

 

 

Disclaimer:

Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.

2018-08-15T20:55:08+00:00