EPLY reports 27% decline in three months net profit

May 15, 2023

Eppley Limited (EPLY) for the three months ended March 31, 2023, reported Net Interest Income for the quarter of $37.46 million down from the $44.94 million recorded in the corresponding period of 2022.

Administrative expenses rose 9% for the quarter to close at $61.95 million up from $56.73 million recorded for the first quarter of 2022. Also, ‘Net impairment gain of financial and contract assets’ amounted to $242,000 for the period under review relative to a loss of $165,000 for the same period in 2022.

Pre-tax profit closed at $73.40 million for the first three months of 2023, 21% less than the $92.88 million booked in 2022. Taxation at the end of March 2023 amounted to $6.38 million (2022: $1.27 million), resulting in a net profit of $67.02 million, a decline of $24.60 million or 27% from the $91.62 million recorded for the same quarter in 2022.

Total comprehensive income for the three months ended March 2023 closed at $50.09 million, a 44% fall when compared to $89.78 million booked the corresponding period.

Earnings per share for the quarter amounted to $0.35 (2022: $0.48). The trailing twelve months earnings per share amounted to $1.11. The total amount of shares outstanding used for this calculation was 192,468,300 units. Notably, EPPLEY last traded on May 12, 2023 at J$36.52 with a corresponding P/E ratio of 32.82x.

EPLY noted, “The financial performance this quarter was affected by two timing related impacts. Firstly, last year we received approximately $19 million in dividends from our investment in NorthStar in the first quarter. This year we expect to receive that dividend in the second quarter. Secondly, our first quarter results do not reflect the impact of the tender for 45.04% of the Eppley Caribbean Property Fund-Development Fund shares as the effective date of the transaction was on April 11, 2023 or just shortly after the end of the quarter. We expect the transaction to result in a gain on bargain of approximately $220 million which will be reflected in the second quarter. Had these two items been reflected in the first quarter our net profit after tax for the first quarter would have been over $300 million or more than our earnings in all of 2022.”

Balance Sheet Highlights:

As at March 31, 2023, total assets amounted to $5.36 billion, relative to the $5.34 billion recorded a year ago. The marginal increase in assets was driven primarily by ‘Cash and deposits’, which climbed by 67% to close at $749.42 million (2022: $449.01 million).

Shareholder’s Equity as at March 31, 2023, totalled $954.90 million (2022: $976.55 million) resulting in a book value per share of approximately $4.96 relative to the $5.07 reported in 2022.


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