November 15, 2023
JMMB Group Limited (JMMBGL) for the six months ended September 30, 2023, reported a 18% increase in Interest income totaling $19.53 billion compared to $16.50 billion in the corresponding period last year. Interest income for the second quarter had a 12% increase to close at $9.68 billion compared to $8.66 billion for the comparable quarter of 2022.
Interest expense amounted to $15.38 billion (2022: $10.80 billion).
Net interest income amounted to $4.15 billion (2022: $5.70 billion), this represents a decrease of 27% year over year. For the quarter, net interest income totalled $2.05 billion (2022: $2.79 billion). The decline reflected the challenging operating environment as global interest rates are much higher than the prior period.
Fees and commission income decreased by 13% to close at $2.73 billion (2022: $3.14 billion), while Gains on securities trading, net increased by 81% from $1.84 billion in 2022 to $3.33 billion in the period under review. As a result, operating revenue net of interest expense for the six months ended September 30, 2023 amounted to $11.70 billion, a 6% decrease relative to $12.39 billion reported in 2022.
Total Operating Expenses for the six months ended September 30, 2023, amounted to $10.96 billion, a 10% increase relative to $9.96 billion reported in 2022 to account for inflationary increases and also strategic spend related to longer-term initiatives.
Operating Profit totalled $739.94 million, a 70% decrease from the corresponding period last year. (2022: $2.43 billion).
Share of profits booked in associated company, Sagicor Financial Company Limited, for the six months ended September 30, 2023, amounted to $1.61 billion, relative to Loss of $5.53 billion reported in 2022.
Profit before Taxation for the six months ended September 30, 2023, amounted to $1.31 billion, relative to loss before taxation of $3.90 billion reported in 2022. Loss before Taxation for the second quarter amounted to $719.15 million (2022: Loss of $1.87 billion).
Tax credit for the six months ended September 30, 2023, amounted to $605.56 million (2022: Tax charge of $159.95 million). As such, net profit booked was $1.92 billion (2022: Net loss of $4.06 billion).
Net profit attributable to shareholders for the six months amounted to $1.81 billion, relative to loss of $4.22 billion reported in 2022. For the second quarter, net loss attributable to shareholders was $693.02 million (2022: Net loss of $1.98 billion).
JMMBGL noted, “Year to date performance stands at J$1.9B facing a challenged outturn as the Group faced severe headwinds of a persistently high interest rate environment. For the quarter ended September 30, 2023, the Group incurred a net loss, driven by the Group’s Investment business line that continued to be impacted by the high interest rate environment and volatile markets which significantly reduced investment and trading opportunities. Additionally, the Group’s performance was also impacted by losses from its associate company, Sagicor Financial Corporation (SFC), on account of changes in actuarial liabilities assumptions coupled with the adoption of IFRS 17. Nevertheless, for the six months period, the Group’s diversification strategy remained strong which resulted in 8% growth in banking and related services amounting to J$6.9 billion at the end of the period. The Group’s diversification strategy of earnings across countries and business lines continues to ensure sustainability in adverse market conditions”.
Consequently, Earnings Per Share for the six months amounted to $0.93 (2022: LPS of $2.16), while Loss Per Share for the quarter totaled $0.35 (2022: LPS of $1.01). The twelve-month trailing EPS was $2.31 and the number of shares used in these calculations was 1,955,552,532.
Notably, JMMBGL’s stock price closed the trading period on November 14, 2023 at a price of $27.20 with a corresponding P/E ratio of 11.80x.
Balance Sheet Highlights
The company’s assets totalled $688.13 billion (2022: $633.71 billion). The growth in total assets mainly reflected a $38.71 billion increase in ‘Loans and notes receivables’ to close at $200.16 billion (2022: $161.45 billion).
Shareholder’s equity was $50.26 billion (2022: $42.37 billion), representing a book value per share of $25.70 (2022: $21.67).
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