JSE reports 11% decrease in six months net profit

July 29, 2021

Jamaica Stock Exchange Limited (JSE), for the first six months ended June 30, 2021 recorded total revenue of $851.94 million, a 4% decrease when compared to the $886.85 million booked the prior year’s corresponding period. For the second quarter the Company reported a 17% increase in total revenue to close the quarter at $441.49 million (2020: $378.26 million). JSE’s revenue breakdown for the six months period are as followed:

o    Cess income decreased 23% to $133.58 million relative to $174.45 million the previous year.

o    Fee income grew $11.04 million to close the period at $646.49 million (2020: $635.45 million).

o    E-campus showed an increase of 27% to $21.62 million, relative to $16.99 million in 2020.

o    Other operating income fell 16% during the period to total $50.24 million compared to $59.95 million in 2020.

Total expenses for the second quarter increased by 10% to $284.66 million (2020: $259.14 million), while a 3% growth was noticed for the six months period ended June 2021. Expenses for six months moved from $575.39 million in 2020 to $590.02 million booked for the period under review. Of this:

  • Staff Costs had a 20% increase for the period totaling $269.61 million (2020: $224.53 million). Staff Costs for the quarter increased by 23% to $135.51 million (2020: $109.91 million). JSE noted that this was mainly due to, “salary increases in 2021 and salaries associated with new staff hires required to support the expansion of current business.”
  • Property expenses climbed 5% to $125.39 million (2020: $119.10 million) during the period under review. In addition, property expenses in Q2 exceeded 2020 by 12% amounting to $63.24 million (2020: $56.26 million). “This is attributed to increases in maintenance costs and licences expense,” as per Management.
  • Depreciation and amortization totalled $32.93 million relative to $33.71 million in 2020.
  • Advertising and promotion decreased from $60.52 million booked for the first six months of 2020 to $42.64 million for the corresponding period in 2021. For the quarter, Advertising and promotion increased 5% to $9.04 million (2020: $8.61 million).
  • Professional fees amounted to $57.90 million (2020: $45.58 million), a 27% increase year over year, for the six months ended June 2021. For the quarter, JSE registered an 8% decrease in Professional fees to close at $24.64 million (2020: $26.79 million).
  • Securities commission fees posted a 24% decrease year over year to close at $20.35 million (2020: $26.65 million). Likewise, during the quarter, Securities commission fees decreased 8% to $12.57 million (2020: $13.64 million).
  • E-campus expenses increased by 5% to $15.43 million (2020: $14.76 million), while, for the quarter E-campus expense increased by 37% to $9.03 million (2020: $6.60 million).
  • Impairment, Less Recoveries for the six months amounted to $1.17 million (2020: $17.84 million) while for the quarter, Impairment, Less Recoveries totalled $3.93 million (2020: $9.60 million). JSE noted that, “this decrease represents a reduction in receivables on which expected credit loss is calculated.
  • Other operating expenses decreased by 25% to $24.60 million from $32.69 million the previous year. Whereas, Q2 experience a decrease of 4% to $10.44 million (2020: $10.93 million).

Investment income declined from $22.79 million posted for the six months period in 2020 to $19.54 million, reflecting a 14% decline year over year.

Consequently, profit before tax totaled $281.46 million compared to $334.25 million the year prior. For the second quarter the company reported a 24% increase in profit before taxation totaling $167.12 million compared to $135.30 million recorded for the prior year’s similar quarter. Tax charges for the six months fell to $91.04 million relative to $121.12 million the prior year.

As such, JSE reported a net profit of $190.42 million for the six months compared to a profit of $213.13 million for the prior year, an 11% decline year over year. Net profit for the quarter had a 32% increase to total $116.29 million compared to $87.99 million the year prior. JSE highlighted that, “this improvement is due to the revenue derived from increased Fee Income as well as new service being offered by the Group.”

Total comprehensive income for the six months closed at $190.25 million relative to an income of $205.54 million. As for the quarter, total comprehensive amounted to $117.98 million (2020: $101.97 million).

Earnings per share for the six months totaled $0.27 compared to $0.30 in 2020. EPS for the quarter amounted to $0.17 (2020: $0.13). The trailing twelve months earnings per share amounted to $0.55. The numbers of shares used in the calculations are 701,250,000 units. JSE stock price last traded on July 28, 2021 at $17.31 at a corresponding P/E of 31.59 times.

Management stated that, “The JSEG will continue in the medium to long term to pursue a strategic path of growth through the promotion of new and existing markets, new product development and the continuous improvement in systems and service delivery to the JSEG’s customers and other stakeholders.”

Balance Sheet at a glance:-

As at June 30, 2021, assets totaled $2.07 billion, a 12% increase when compared with its balance of $1.85 billion a year prior. The increase was due to an 18% increase in ‘Property, Plant and Equipment’ from $592.19 million in 2020 to $697.02 million in 2021 and a 63% increase in ‘Government Securities’ to amount to $433.62 million (2020: $266.05 million).

Shareholders’ Equity amounted to $1.61 billion (2020: $1.42 billion), resulting in a book value per share of $2.30 (2020: $2.02).



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