JSE reports 41% decline in three months net profit

Market News

May 13, 2021

May 13, 2021

Jamaica Stock Exchange Group (JSE) for the three months ended March 31, 2021 recorded total revenue of $410.44 million, a 19% decrease when compared to the $508.59 million booked the prior comparable quarter. Of this:

Cess income reduced by 42% from $86.64 million booked as at March 2020 to $50.27 million recorded for the period under review.
Fee income fell by 14% to $310.68 million to close the quarter under review, compared to $362.51 million reported in the same quarter of 2020.
E-campus showed a decrease of 5% to $9.51 million relative to $9.99 million documented in the prior comparable quarter.
Other operating income fell 19% during the period to total $39.98 million compared to $49.45 million booked in the same quarter last year.
The Company noted, “The decrease can be attributed to depressed market conditions which have resulted in declines in Cess Fee and Fee Income by $36.3m (42%) and $51.8m (14.3%) respectively over the comparable period.”

Total expenses for the year decreased by 3% moving from $316.24 million recorded as at March 2020 to $305.36 million in the first quarter of 2021. Of this:

Staff cost increased 17% to total $134.11 million for the period under review (2020: $114.61 million).
Depreciation and amortization totaled $16.67 million for the quarter under review relative to $16.91 million recorded in the prior comparable quarter.
Professional fees amounted to $33.25 million (2020: $18.78 million), a 77% increase due, “primarily to consultancy services aligned to business expansion plans,” as stated by JSE.
Property expenses fell 1% to $62.15 million (2020: $62.85 million) for the period under review.
Other operating expenses declined by 35% to $14.16 million (2020: $21.76 million).
Advertising and promotion expenses reflected a decrease of 35% from $51.91 million in 2020 to $33.59 million booked for the first quarter of 2021. Management noted, “This was mainly due to the transition of stakeholders’ engagement activities to virtual delivery platforms in compliance with social distancing requirements.”
Securities commission fees posted a 40% decline to close at $7.78 million (2020: $13.01 million).
Net impairment gain closed at $2.76 million, when compared to a net impairment loss of $8.24 million booked in the previous corresponding quarter. E-campus expense decreased by 22% to $6.40 million (2020: $8.16 million).

Investment income rose from $6.60 million recorded for the first quarter in 2020 to $9.25 million as at March 2021.

Profit before tax totaled $114.33 million compared to $198.95 million reported in the same quarter of last year.

Tax charges for the quarter totaled $40.20 million (2020: $73.80 million). As such, JSE reported a net profit for the quarter of $74.13 million compared to a profit of $125.14 million in the prior comparable quarter, a 41% decrease.

Total comprehensive income amounted to $72.27 million relative to $103.57 million recorded in the previous corresponding quarter.

Earnings per share for the quarter totaled $0.11 (2020: $0.18). The twelve-months trailing EPS is $0.51. The numbers of shares used in the calculations are 701,250,000 units. JSE stock price closed the trading period on May 13, 2021 at $17.97 with a corresponding P/E of 35.41 times.

Furthermore, Management notes, “In the First Quarter the JSE Private Market was rolled out to a very receptive market. 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 s customers and other stakeholders.”

Balance Sheet at a Glance:

As at March 31, 2021, total assets totaled $2.10 billion, a 17% increase when compared to $1.80 billion a year prior. The increase was due to a 109% increase in ‘Government Securities Purchased Under Resales Agreements’ from $443.46 million in 2020 to $211.80 million booked for the current period. ‘Property, Plant and Equipment’ also contributed to the increase amounting to $688.16 million (2020: $590.92 million).

Shareholders’ Equity amounted to $1.61 billion (2020: $1.31 billion), resulting in a book value per share of $2.29 (2020: $1.87).

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