November 16, 2020
Eppley Limited (EPLY), for the nine months ended September 30, 2020 reported Interest Income for the period of $247.67 million relative to $269.52 million the previous year, an 8% decrease. While for the third quarter interest income amounted to $78.69 million relative to $89.85 million in 2019. Management noted, “Interest income decreased mainly due to the termination of a few large factoring arrangements recorded in 2019 that expired this year as well as a shift in the composition of our investment portfolio.”
Interest Expenses amounted to $153.93 million, up 5% from $146.69 million for the corresponding period in 2019. While, for the quarter, interest expense closed at $52.50 million (2019: $51.56 million).
Consequently, net interest income fell 24% to $93.74 million, down from $122.83 million in the corresponding period of 2019. Net interest income for the third quarter amounted to $26.20 million relative to $38.29 million for the corresponding quarter of 2019.
Other operating income increased by 87% to total $192.07 million relative to $102.84 million in 2019, while administrative expenses increased by 5% to close at $130.71 million (2019: $125.01 million). Net impairment losses of financial and contracts assets amounted to $27,000 (2019: nil).
Share of net profit from joint venture amounted to $11.01 million relative to $10.55 million booked the year prior.
As such, pre-tax profit closed at $166.08 million for the nine months ended September 30, 2020, 49% more than the $111.21 million booked in 2019. Taxes for the nine months ended September 30, 2020 amounted to $1.43 million relative to $$1.69 million booked for the prior period and as such net profit amounted to $164.66 million, relative to net profit of $109.52 million in 2019. Third quarter net profit amounted to $57.61 million relative to $33.09 million in last year.
The Company highlighted that, “profitability growth was driven primarily 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. These income streams are stable and recurring and enhance the quality of Eppley’s earnings and the resiliency of our business.”
Total comprehensive income for the period under review amounted to $167.25 million (2019: $93.34 million). For the quarter total comprehensive income amounted to $61.22 million (2019: $16.21 million).
Earnings per share for the nine months ended September 30, 2020 totalled $0.86 compared to $0.57 for the corresponding period in 2019, while earnings per share for the quarter amounted to $0.30 (2019: $0.17). The trailing twelve months EPS is $1.14. The total amount of shares outstanding used for this calculation was 192,468,300 units. EPLY closed the trading period at $18.99 on November 13, 2020.
Balance Sheet Highlights:
As at September 30, 2020, total assets amounted to $3.95 billion, 4% more than last year’s $3.77 billion in 2019. This was attributed to a rise in ‘Investment Securities’ by 79% to close the period at $943.69 million (2019: $527.93 million). However, this was tempered by a 79% decrease in ‘IPF Receivables’ which closed at $87.24 million (2019: $414.09 million).
Shareholder’s Equity increased by 5% as at September 2020, to total $907.13 million compared to the previous year’s total of $785.60 million, this resulted in a book value per share of approximately $4.71 relative to $4.08 in 2019.
DISCLAIMER
Analyst Certification –This research report is for information purposes only and should not be construed as a recommendation. 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.