February 15, 2021
In United States dollars (except where it is indicated otherwise)
Proven Investments Limited (PROVEN) for the nine months ended December 31, 2020 reported interest income of $8.80 million, a 49% decrease when compared with the $17.29 million reported for the same period in 2019.
Interest expense for the period amounted to $6.57 million, a 12% decrease when compared to the $7.42 million booked for the comparable period in the prior year. As such, net interest income for the nine months ended witnessed a 77% decrease to total $2.24 million relative to the $9.86 million in the corresponding period of the previous year. Net interest income for the quarter amounted to $694,823 reflecting a decrease of 45% relative to the $1.27 million achieved in the corresponding quarter of the previous year.
The Company booked a gain on securities trading of $4.27 million relative to the gain of $3.72 million recorded for the comparable period for the previous year. Dividend income amounted to $28,789, a 49% decrease from the $54,108 recorded in 2019, while Fees & Commission income notably increased by 46% to $5.08 million relative to $9.46 million in 2019.
Other income moved from $2.92 million in 2019 to total $4.06 million for nine months ended December 31, 2020, an increase of 39%. Proven booked a decrease in pension management income to total $2.36 million, from $2.51 million booked last year for the same time period.
Consequently, net revenue decreased by 37% to total $19.02 million compared to $30.24 million recorded for the corresponding period in 2019. For the quarter, Net Revenue fell 29% to $4.98 million relative to $6.97 million in 2019.
Operating Expenses fell 32% for the period to total $14.58 million relative to $21.50 million in 2019. Of this, Administrative and General Expenses recorded a 35% decrease to close at $13.46 million relative to $20.69 million documented for the prior year. Depreciation and Amortization fell 4% to $1.34 million (2019: $1.39 million), while IFRS 9 Provisioning was $215,624 (2019: $582,992).
Operating expenses for the quarter fell 11% to $4.96 million versus $5.55 million booked for the comparable quarter in 2019.
Consequently, Operating Profit for the period and the quarter fell 49% and 99% respectively to $4.43 million (2019: $8.74 million) and $19,628 (2019: $1.42 million) respectively.
Payment of Preference Share Dividend decreased 83% to $1.25 million (2019: $7.42 million). Share of Results of Associates amounted to $5.50 million (2019: $5.74 million) and No gain on disposal of associate totalled was recorded (2019: $24.45 million). Proven noted, “the performance of its Treasury segment of the Group was predominantly driven by the decline in Net Interest Income due to both the impact of lower rates as well as the deliberate shift in strategy away from the carry trade.”
Profit before tax amounted to $8.69 million versus the $31.52 million booked in 2019. Taxation decreased year over year by approximately 48% from $1.73 million for the nine months ended December 2019 to $897,169 in 2020. As such, Net Profit amounted to $7.79 million, a 74% decrease when compared to the $29.78 million in 2019. Proven booked profit for the third quarter of $1.65 million compared to $2.96 million recorded for the comparable period in 2019.
Net profit attributable to shareholders for the nine months amounted to $6.31 million relative to $27.60 million. Profit attributable to shareholders for the quarter totalled $1.51 million versus $2.65 million booked in 2019.
Earnings per share (EPS) for the nine months amounted to $0.0101 (2019: $0.0441), while the EPS for the quarter amounted to $0.0024 (2019: $0.0042). The twelve-month trailing EPS amounted to $0.0139. 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 15, 2021 at US$0.26 and $37.99, respectively.
Management noted, “PIL is well positioned to benefit from the expected business cycle recovery over the next year and beyond; driven by COVID-19 vaccine distribution, continued easy monetary policy in the US, and easing of mobility restrictions all things being equal.”
Balance Sheet Highlights:
Total Assets as at December 31, 2020 amounted to $649.73 million (2019: $685.34 million), a 5% decrease. The contraction resulted from the Company booking $259.06 million in ‘Investment securities’ relative to $327.05 million in 2019. Additionally, the Company recorded $10.95 million in ‘Investment property’ versus the $16.16 million booked in 2019.
Shareholders’ Equity totalled $136.17 million relative to $119.20 million in 2019; as such book value per share now amounts to $0.22 (2019: $0.19).
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