PJAM reports 118% increase in six months net profit attributable to shareholders

Date: August 14, 2019

PANJAM Investment Limited (PJAM) for six months ended June 30, 2019 reported a 105% increase in total income to $2.30 billion relative to $1.12 billion booked for the prior year’s corresponding period. For the quarter, total income increased 187% to close at $1.72 billion (2018: $600.33 million).  Of total income:

  • Investment increased 710% to close at $1.28 billion (2018: $157.86 million).
  • Other income grew 46% or $28.02 million from $61.07 million to $89.08 million.

The Company noted, “ Investment income improved primarily as a result of realised and unrealized gains on local listed equities as the Jamaica Stock Exchange continued to perform well. This was augmented by improved foreign exchange gains driven by higher Jamaican dollar devaluation year over year. Property income improved during 2019 due to improved occupancy and rental rates, which offset lower property revaluation gain accruals. Other income during 2019 was increased by collection of items previously written off.”

Operating expenses amounted to $847.49 million for the first six months ended June 30, 2019 (2018: $773.03 million), 10% more than its total a year prior. Operating expenses for the quarter increased at 11% to close at $446.32 million (2018: $401.43 million). PJAM stated, the movement in operating expenses was “due mainly to higher staff-related and maintenance costs as well as higher electricity and insurance rates.”

Consequently, Operating Profits jumped by 330% to a total of $1.44 billion relative to $335.30 million a year earlier, while for the quarter operating profit soared to $1.25 billion (2018: $183.39 million).

Finance costs for the period rose by 22%, amounting to $378.34 million compared to the $310.17 million for the comparable period in 2018. This was attributable to, “higher average debt balances and charges resulting from the prepayment of bonds with funds raised at lower interest rates.”

Gain on Disposal of associated company amounted to $941 million relative to $47.31 million for the prior year, while the Share of results of associated companies increased 17% to $2.12 billion (2018: $1.81 billion).

Profit before taxation increased 119% closing the period at $4.13 billion (2018: $1.88 billion). Following taxation of $170.60 million (2018: $59.47 million), Net Profits amounted to $3.96 billion (2018: $1.82 billion).

Net Profit Attributable to Shareholders for the period amounted to $3.95 billion, a 118% increase over the $1.81 billion recorded the year prior. For the second quarter, profit attributable to shareholders amounted to $3.06 billion relative to $981.95 million.

Consequently, earnings per share for the period amounted to $3.70 (2018: $1.70), while the second quarter amounted to $2.87 (2018: $0.92). The trailing twelve months earnings per share was $7.01. The number of shares used in the calculation is 1,066,159,890 units. PJAM’s stock last traded on August 13, 2019 at $100.16.

PJAM stated, “Fundamental economic indicators continue at or near all-time positives, with unemployment falling to 7.8% as at April 2019 and the benchmark six-month Treasury bill rate at a record 1.82% at the last auction. During the March quarter, the Bank of Jamaica reduced the policy interest rate by 25 basis points on two occasions. There was also a reduction in the cash reserve requirement for commercial banks. These measures were taken to improve liquidity and accelerate expansion of private sector credit, which should facilitate faster growth. We continue to believe that other areas should be addressed in order to stimulate economic activity. Among the most important of these is improved efficiency of regulatory and bureaucratic systems, particularly those necessary for development projects to obtain approvals to proceed. High levels of crime and low confidence in solutions presented to date, as well as negative perceptions related to corruption in the public sector, also continue to be suppressive of growth. We would encourage our leaders to give these areas primary focus.”

Balance Sheet at a glance:

As at June 30, 2019, PJAM had assets totaling $50.31 billion, a 26% increase relative to $39.94 billion a year prior. The growth was attributed to an increase in Investment in associated companies which amounted to $28.63 billion (2018: $24.68 billion) as well as a 119% increase in ‘Securities purchased under agreements to resell’ which closed at $1.20 billion (2018: $546.08 million). In addition the company booked ‘Financial assets at fair value through profit and loss’ of $7.79 billion relative to nil the prior year.

Shareholders Equity amounted to $38.81 billion (2018: $31.10 billion) with a book value per share of $36.40 (2018: $29.17).

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