138SL reports 38% decrease in six months net profit

May 10, 2021

138SL’s income decreased by 29% to $522.64 million relative to the $733.59 million recorded for the corresponding six months period the year prior. Other operating income increased for the period under review, grew 84% to $36 million relative to $19.57 million a year earlier.  Income for the quarter declined by 4% to $267.07 million (2020: $278.35 million), while other operating income climbed 42% to $15.43 million (2020: $10.86 million).

Administrative expenses decreased by 22% for the period amounting to $278.64 million (2020: $357.57 million). As for the quarter, there was a 10% decline to $136.93 million versus $152.57 million reported in the prior year’s corresponding period. Thus, operating profit for the six months ended March 31, 2021 closed at $279.96 million, a decrease of 29% compared to $395.58 million that was recorded for the comparative period in 2020. Operating profit for the quarter closed at $145.58 million (2020: $136.65 million).

The Company reported finance costs of $114.56 million (2020: $134.47 million), a 15% decline year over year. For the quarter, finance cost dropped 17% to close at $55.46 million (2020: $66.79 million).

Profit before taxation for the six months period amounted to $165.39 million compared with a profit before taxation of $261.11 million for the similar period last year. For the quarter profit before taxation amounted $90.12 million (2020: $69.86 million). Management stated, “the results of the quarter are positively impacted by the recording of the 90% Occupancy Guarantee under the Concession Agreement.”

Following tax credits of $1.40 million (2020 tax credit: $9.09 million), net profit totalled $166.79 million versus a net profit of $270.20 million recorded in 2020. Net profit for the quarter closed at $100.87 million relative to a net profit of $87.34 million the prior year.

Total comprehensive income for the six months ended March 31, 2021 amounted to $166.79 million relative to an income of $270.01 million last year. For the second quarter, total comprehensive income summed to $100.87 million versus a total comprehensive income of $87.15 million the prior year.

Earnings per share (EPS) for the six months ended March 31, 2021 amounted to $0.40 relative to an earning per share of $0.65 a year earlier. The EPS for the quarter totalled $0.24 relative to an EPS of $0.21. The twelve-month trailing EPS $0.52. The number of shares used in this calculation was 414,500,000. As at May 10, 2021, the stock traded at $4.39 with a corresponding P/E of 8.53 times.

138SL highlighted that, “During the period under review, 138SL operated 1,464 world-class rooms at its four (4) locations on the UWI Mona Campus consisting of 1,692 beds. Whilst the Covid-19 pandemic continues to negatively impact the business operations, there has been a steady growth in occupancy since the start of the January 2021 academic semester. Occupancy increased from an average of fifteen percent (15%) to an average of forty five percent (45%). Management is optimistic that this trend will continue upon the commencement of the upcoming academic year. With the introduction of the vaccination programme, it is anticipated that more face-to-face classes will resume which will increase the demand for student accommodation.”

Furthermore, “The team remains motivated not just to contain cost, but also to grow revenues from the short-term rental business. We see the short-term rental business as an opportunity for increased revenue and will continue our efforts to grow this business portfolio. We remain committed to our long-term strategic goal of delivering long term shareholder value.” as per 138SL.

Balance Sheet at a Glance:

As at March 31, 2021, total assets decreased by 9% to $10.09 billion (2020: $11.14 billion). This decrease was primarily driven by ‘Financial asset-service concession’ which closed at $8.87 billion (2020: $10.19 billion).

Shareholders’ equity totalled $4.70 billion (2020: $5.82 billion) which resulted in a book value per share of $11.34 (2020: $14.03).


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