JSE reports 88% increase in six months net profits

Date: July 19, 2018

Jamaica Stock Exchange Limited (JSE) ,for the first six months ended June 30, 2018 recorded total revenue of $665.92 million, a 39% increase when compared to the $477.65 million booked the prior year’s corresponding period. For the second quarter the company reported a 34% increase in total revenue to close the quarter at $316.34 million (2017: $236.58 million). The company noted, “this can be attributed mainly to Cess Fee which increased by $43.5 million (75.3%) when compared to the corresponding quarter for 2017 due to an increase in aggregate trading value for the period under review.” JSE attributed the movement of the following areas in the six months:

o Cess income increased 80% to $227.33 million relative to $126.37 million the previous year.
o Fee income grew $92.96 million to close the period at $388.20 million (2017: $295.24 million).
o E-campus showed a decrease of 14% to $6.81 million, relative to $7.94 million in 2017.
o Other operating income fell 9% during the period to total $43.58 million compared to $48.10 million in 2017.

Total expenses for the six months increased up by $68.20 million or 21% moving from $329.82 million in 2017 to $398.02 million. Of this:

o Staff Costs had a 12% increase for the period totaling $171.29 million (2017:$152.78 million). Staff Costs for the quarter increased by $7.56 million or 10% which was, “due to salaries associated with new staff hires required to support the expansion of current business.”
o Depreciation and amortization totaled $25.44 million relative to $15.28 million in 2017. For the second quarter this depreciation and amortization went up by $3.87 million (43%) due to additional assets and software which were required to support the business.”
o Professional fees amounted to $33.76 million, a 29% increase year over year.
o Property expenses climbed $11.80 million to $67.38 million during the period under review. In addition, property expenses in Q2 exceeded 2017 by $8.15 million (30%) which was, “largely associated with expenditure relating to the JSEG Business Continuity Plan.”
o Other operating expenses increased by 29% to $25.87 million from $20.09 million the previous year.
o Advertising and promotion declined from the $34.42 million booked for the 2017 six month’s results to $30.51 million.

Investment income moved from $10.81 million posted for the first six months of 2017 to $16.65 million, reflecting a 54% growth year over year.

Consequently, profit before tax totaled $284.52 million compared to $158.65 million the year prior. For the second quarter the company reported a 80% increase in profit before taxation totaling $133.52 million compared to $74.09 million the prior 2017 quarter. Tax charges for the six months rose to $93.45 million relative to $56.89 million the prior year.

As such, JSE reported a net profit of $191.07 million for the six months compared to a profit of $101.75 million for the prior year, an 88% advance. Net Profit for the quarter had a 97% increase to total $89.76 million compared to $45.51 million the year prior. JSE highlighted, “this represents an improvement of $44.3 million (97.4%) for the group when compared to the profit of $45.5 million for the corresponding period in 2017. Improvement in net profit continues to be positively impacted by Cess Fee and Income from the wider range of products and services that are now being offered by the JSEG.”

Earnings per share for the six months totaled $0.27 compared to $0.15 in 2017, the while the trailing earnings per share amounted to $0.44. EPS for the quarter amounted to $0.13 (2017: $0.06) The numbers of shares used in the calculations are 701,250,000 units. JSE stock price last traded on July 18, 2018 at $7.45.

JSE, “The second quarter performance has been favorable and the outlook for the remainder of the year is positive as it is expected there will be more listing of companies. The Group 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 of service delivery to the Group’s customers and other stakeholders. ”

Balance Sheet at a glance:-

As at June 30, 2018, JSE total assets valued $1.33 billion, 8% increase when compared with its balance of $1.24 billion a year prior. This was attributed by an increase of $145.71 million in ‘Property, Plant & Equipment’ to close the period at $409.78 million (2017: $264.07 million).

Shareholders’ Equity amounted to $1.03 billion (2017: $891.43 million), resulting in a book value per share of $1.47 (2017: $1.27).

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