EPLY reports 38% increase in year end net profit

February 16, 2021

Eppley Limited for the year ended December 31, 2020 reported interest income of $332.91 million a 5% or $17.31 million decline when compared $350.22 million recorded for the corresponding period in 2019. Total interest income for the quarter amounted to $85.24 million a 16% decrease when compared to the $101.37 million recorded for the same quarter in 2019.

Interest expenses for the period amounted to $207.68 million, a 5% increase when compared to $197 million recorded for the prior year.

Consequently, net interest income for the financial year fell 18% to total $125.23 million down from the $153.22 million recorded in the corresponding period of 2019. Net interest income for the fourth quarter amounted to $31.49 million relative to $51.06 million in 2019.

Asset Management fee income amounted to $194.24 million (2019: $103.96 million) while fees and other operating income for the period closed at $85.98 million relative to $57.69 million booked for 2019.

Administrative expenses rose 16% for the year to close at $190.16 million up from $163.96 million recorded in the previous year.

Eppley recorded a total of $10.82 million for share of net profit from joint venture accounted for using the equity method for the period relative to the $10.55 million recorded for the corresponding period in FY2019.

Net impairment losses of financial and contracts assets totalled $939,000 versus $1.17 million documented in the prior comparable year.

As such, pre-tax profit closed at $225.17 million for the year ended December 31, 2020, 40% more than the $160.29 million booked in 2019. A tax credit of $168,000 was booked, relative to the tax credit of $3.23 million reported a year prior.  This resulted in a net profit attributable to shareholders of $225.34 million, a 38% increase from the $163.52 million recorded for the same period in 2019. Net profit for the quarter amounted to $60.69 million, a 26% uptick when compared with the $48.17 million recorded for the last quarter in 2019. The company highlighted, “Our profits grew significantly despite a reduction in interest income. Profitability growth was driven mostly by the expansion of our asset management business. Asset management fees and the dividends we receive from our subsidiaries and affiliates are reflected in our financial statements as other operating income.”

Total comprehensive income amounted to $271.28 million (2019: $180.32 million).

Earnings per share for the quarter amounted to $0.32 (2019: $0.25). Earnings per share for the year ended December 31, 2020 totalled $1.17 compared to $0.85 for the corresponding period in 2019. The total amount of shares outstanding used for this calculation was 192,468,300 units. Notably, the stock price for EPLY closed the trading period on April 1, 2021 at J$34.10 with a corresponding P/E ratio of 29.13 times.

Eppley noted, “Eppley remains well capitalized. Our proprietary portfolio is diversified, carefully underwritten and continues to perform. Our asset management business adds earnings largely insulated from credit or market risks. We expect to focus on carefully deploying our excess liquidity and continuing to grow our asset management business in 2021.”

Balance Sheet Highlights:

As at December 31, 2020, total assets amounted to $4.14 billion, relative to the $3.83 billion recorded a year ago. The increase in assets was driven primarily by increases in ‘Cash and Deposits’ which amounted to $680.59 million (2019: $550.14 million), ‘Lease receivables’ which closed at $587.13 million (2019: $500.77 million) and ‘Investment Securities’ amounting to $977.87 million from $880.65 million in 2019.

Shareholder’s Equity as at December 31, 2020 totalled $1 billion (2019: $863.91 million) resulting in a book value per share of approximately $5.22 relative to $4.49 in 2019.


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