Date: August 13, 2018

Kingston Properties Limited (KPREIT), for the six months ended June 30, 2018, reported rental income of $106.51 million, 5% more than the $101.09 million reported for 2017. However, for the quarter, there was a 1% decline from $50.98 million in 2017 to $50.55 million. Property management fees for the six months period amounted to $1.93 million (2017: $5.97 million).

Operating expenses increased by 10% to $68.52 million (2017: $62.10 million). According to management, “Operating expenses for the first half of the year reflect higher year on year direct property charges for HOA fees, insurance and commissions.” The Company recorded a Fair value loss on investment properties of $10.57 million (2017: nil).

Miscellaneous gain went up 2% to $149,000 in 2018 (2017: $146,000), while, Miscellaneous gain for the second quarter amounted to $63,000, up 37% from $46,000 reported for the comparable quarter of 2017.

As such, Results of operating activities before other gains amounted to $24.11 million, a 47% decline (2017: $45.10 million) compared to the corresponding period in 2017.

Finance cost was $22.75 million for the six months ended March 31, 2018 compared with $19.84 million for the same period of 2017, a 15% growth. Finance income for the period totalled $31.24 million versus $397,000 for the corresponding period for 2017. Consequently, the company recorded an improvement in net finance cost to $8.49 million (2017: $19.44 million). The company highlighted that, “This decline was primarily due to the depreciation of the Jamaican dollar resulting in net unrealized gains on translation of foreign currency investments and borrowings.”

This led to a profit before taxation of $32.60 million, a 27% increase relative to the $25.66 million the year prior.

Tax credits of $30.87 million were booked compared to a tax charge of $4.87 million last year. Net Profit for the period was $63.47 million compared to $20.79 million for the similar period last year. Net profit for the quarter rose 32% to $26.13 million (2017: $19.74 million).

Earnings per share amounted to $0.197 for the period (2017: $0.065).  The EPS for the second quarter was $0.081 (2017: $0.061). The twelve-month trailing EPS amounted to $0.38. The number of shares used in our calculations is 321,992,668. As of August 13, 2018, the stock was trading at $5.50.

Management highlighted, “Our diversification strategy continues to reap benefits with rental revenue setting a new high so far this year. Our Jamaican and Caymanian property portfolios continue to do well, with full occupancy and attractive cash yields recorded in those markets. We are currently actively pursuing more acquisitions in these markets and hope to conclude a transaction by the 4th quarter of 2018.”

Balance Sheet at a glance:

As June 30, 2018, assets totalled $2.67 billion, $73.74 million more than the $2.60 billion booked as at June 30, 2017.  The increase in assets was as a result of an increase in cash and cash equivalents which closed at $109.10 million relative to $25.12 million a year earlier. Restricted cash also contributed to the movement with  $15.45 million increase from $9.95 million to $25.40 million.

Shareholder equity closed at $1.78 billion, up 47% from $1.72 billion, resulting in book value per share of $5.56 (2017: $5.33).

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