138SL reports nine months net profit of $283.71 million

August 17, 2021

Income decreased by 21% to $782.53 million relative to the $996.51 million recorded for the corresponding nine months period the prior year. Other operating income also decreased for the period under review to $45.19 million relative to $90.32 million a year earlier. Income for the third quarter fell 1% to $259.89 million (2020: $262.92 million), while other operating income declined 87% to $9.23 million (2020: $70.76 million).

Administrative expenses decreased by 27% amounting to $371.08 million (2020: $506.64 million). As for the quarter, there was a 38% decrease to $92.44 million (2020: $149.06 million). 138SL noted that, “This is a result of a one-off event which reduced bad debt provision and various initiatives implemented to contain costs.”

Thus, operating profit amounted to $456.64 million, a decrease of 21% compared to $580.19 million that was reported for the comparative period the year prior. While for the third quarter, operating profit closed at $176.69 million (2020: $184.61 million), indicating a 4% decline year over year.

The Company also reported finance cost of $176.20 million (2020: $195.33 million), a 10% decrease year on year. For the quarter, finance cost went up by 1% to close at $61.63 million (2020: $60.86 million).

Earnings before taxation for the nine months period amounted to $280.45 million compared with the profit of $384.87 million for similar period last year. Following tax credits of $3.26 million (2020 tax credit: $16.91 million), Net profit totalled $283.71 million, compared to a profit of $401.77 million recorded in 2020. Net profit for the third quarter amounted to $116.92 million relative to a net profit of $131.57 million booked in the previous comparable period.

Earnings per share (EPS) for the period amounted to $0.68 relative to earnings per share of $0.97 a year earlier. The EPS for the quarter totalled $0.28 in contrast to an EPS of $0.32 in the prior comparable period. The twelve-month trailing EPS $0.48. The number of shares used in this calculation was 414,500,000. As at August 16, 2021, the stock traded at $5.10 with a corresponding P/E of 10.64 times.

Furthermore, the company stated that, “Average occupancy levels for the current quarter were slightly below those for the quarter ended March 2021, due mainly to the summer break. During the quarter, 138 SL operated 1,464 world-class rooms at its four (4) locations on the UWI Mona Campus consisting of 1,692 beds. For Irvine Hall specifically, there was a declined by 8% from the prior period January 2021 to March 2021.”

Management also noted that, “We are optimistic that improved occupancy will be realized for the September 2021 semester, with a gradual return to normal pre-Covid-19 levels over the next two years. The rate of vaccinations to achieve herd immunity for Jamaica will have an impact on how quickly this is attained. Discussions are currently being held with our Bondholders to renegotiate certain financing terms to assist in mitigating the impact of the Covid-19 pandemic on the business operations. These discussions are at an advanced stage and the outcome is expected shortly.”

Balance Sheet at a Glance:

As at June 30, 2021, total assets increased by 26% to $10.35 billion (2020: $11.27 billion). This increase was primarily driven by a 28% increase in financial asset-service concession to $8.87 billion (2020: $10.19 billion). Receivables also contributed to the increase with a 114% growth to $1.18 billion relative to $552.28 million recorded twelve months earlier.

Shareholders’ equity totalled $4.82 billion (2020: $5.95 billion) which resulted in a book value per share of $11.62 (2020: $14.35).


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