February 12, 2020

Reported in US$ (except where it is indicated otherwise)

Proven Investments Limited (PROVEN) for the nine months ended December 31, 2019 reported interest income of $17.29 million, a 20% decrease when compared with the $21.52 million reported for the same period in 2018.

Interest expense for the period amounted to $7.42 million, a 37% increase when compared to the $5.42 million booked for the comparable period in the prior year. As such, net interest income for the nine months ended witnessed a 39% decrease to total $9.86 million relative to the $16.10 million in the corresponding period of the previous year. Net interest income for the quarter amounted to $1.27 million reflecting a decrease of 77% relative to the $5.57 million achieved in the corresponding quarter of the previous year.

The Company booked a gain on securities trading of $2.76 million relative to the loss of $304,988 recorded for the comparable period for the previous year. Dividend income amounted to $54,108, a 91% decrease from the $612,205 recorded in 2018, while Fees & Commission income notably increased by 37% to $9.46 million relative to $6.88 million in 2018. Net foreign exchange gain amounted to $1.73 million relative to a gain of $1.29 million recorded in 2018.

Other income moved from $2.96 million in 2018 to total $3.87 million for nine months ended December 31, 2019, an increase of 31%. Proven booked an increase in pension management income to total $2.51 million, up from $2.19 million booked last year for the same time period.

Consequently, net revenue increased by 2% to total $30.24 million compared to $29.72 million recorded for the corresponding period in 2018. For the quarter, Net Revenue fell 39% to $6.97 million relative to $11.50 million in 2018.

Operating Expenses climbed by 17% for the period to total $21.98 million relative to $18.82 million in 2018. Of this, Administrative and General Expenses recorded a 24% increase to close at $21.17 million relative to $17.10 million documented for the prior year. ‘Depreciation and Amortization’ rose 14% to $1.39 million (2018: $1.22 million), while IFRS 9 Provisioning was $583,000 (2018: $493,162).

Operating expenses for the quarter fell 27% to $5.55 million versus $7.57 million booked for the comparable quarter in 2018.

Consequently, Operating Profit for the period and the quarter fell 24% and 64% respectively to $8.27 million (2018: $10.90 million) and $1.42 million (2018: $3.93 million) respectively.

Payment of Preference Share Dividend increased 665% to $7.61 million (2018: $995,236). Share of Results of Associates amounted to $5.74 million (2018: nil) and Gain on disposal of associate totalled $23.97 million (2018: nil). Proven noted, “the performance of its Treasury segment of the Group’s was mainly attributed to the extraordinary gains of $23.97 million realized on PIL’s sale of 50.28% of its holding in AFSL.”

Profit before tax amounted to $30.36 million versus the $9.90 million booked in 2018. Taxation increased year over year by approximately 55% from $1.12 million for the nine months ended December 2018 to $1.73 million in 2019.  As such, Net Profit amounted to $28.63 million, a 226% increase when compared to the $8.78 million in 2018. Proven booked profit for the third quarter of $2.96 million compared to $2.91 million recorded for the comparable period in 2018.

Net profit attributable to shareholders for the nine months amounted to $26.45 million relative to $5.90 million. Profit attributable to shareholders for the quarter totalled $2.65 million versus $2.01 million booked in 2018. Management noted, “This was as a result of solid execution of strategies across the Group to grow core revenues and improve operating efficiency. PIL remains committed to managing its portfolio of assets in an optimal manner in order to create value for its shareholders.”

Earnings per share (EPS) for the quarter amounted to $0.0042 (2018: $0.0032), while the EPS for the nine months amounted to $0.0423 (2018: $0.0094). The twelve-month trailing EPS amounted to $0.044. The number of shares used in our calculations is 625,307,963. Notably, the stock price for PROVEN and PROVENJA closed the trading period on February 11, 2020 at US$0.31 and $46.69 respectively.

Balance Sheet at a glance:

Total Assets as at December 31, 2019 amounted to $685.34 million (2018: $626.71 million), an increase of 9%. The growth resulted from the Company booking $122.81 million in ‘Cash and cash equivalents’ relative to $89.79 million in 2018. The Company recorded $31.41 million in ‘Other Receivables’ versus $11.92 million booked in 2018. The Company also recorded $128.37 million in ‘Investment in Associates’ (2018: $72.44 million), a 77% increase, “reflecting the investment in JMMB,” as noted by the Proven.

Shareholders’ Equity totalled $119.21 million relative to $80.65 million in 2018; as such book value per share now amounts to $0.19 (2018: $0.13). Proven highlighted that the, “material increase in Retained Earnings, due to the gains realised on the disposal of AFL, and continuing improvements in the investment fair valuation reserves on the heels of favourable bond market conditions experienced over the period.”

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