November 16, 2020

In United States dollars (except where it is indicated otherwise)

Proven Investments Limited (PROVEN), for six months ended September 30, 2020 reported interest income of $6 million, a 57% decrease when compared with the $13.81 million reported for the same period in 2019. Interest income for the second quarter amounted to $2.91 million relative to $6.93 million for the second quarter ended September 30, 2019. PROVEN noted, “PIL registered a creditable performance for the period ended September 30, 2020 despite the COVID-19 pandemic and its continued impact on the global and local economy. The trajectory of the economic recovery remains uncertain as the negative effects of COVID-19 continues. However, PIL is well positioned for recovery due to its continued implementation of its risk mitigation measures aimed at mitigating the impact along with maintenance of adequate liquidity levels.”

Interest expense for the first six months amounted to $4.46 million, 15% less when compared to the $5.22 million booked for the prior year. As such, net interest income for the period witnessed a decline of 82% to total $1.54 million relative to the $8.60 million reported for previous year. Net interest income for the quarter fell 85% to $661,721 (2019: $4.34 million).

Dividend income amounted to $10,112, a 75% decrease from the $39,718 recorded in 2019, while fees & commission income notably decreased to $3.40 million relative to $6.90 million for the corresponding period of 2019.

Other income moved from $1.51 million in 2019 to total $3.03 million for the period, a growth of 101%. Proven booked 5% decrease in pension management income to total $1.57 million, up from $1.65 million booked for the prior year’s corresponding period. Gains on securities trading closed at $3.85 million compared $3.39 million. Consequently, net revenue decreased by 40% to total $14.04 million compared to $23.27 million recorded for 2019.

Operating expenses fell by 41% for the six months to total $9.63 million relative to $16.43 million in 2019. Of this, administrative and general expenses recorded a 44% decline to close at $8.92 million relative to $15.81 million documented for the first six months ended September 30, 2019. ‘Depreciation and Amortization’ decreased 3% to $887,863 (2019: $916,210), The Company booked a IFRS 9 provisioning loss of $184,191 compared to loss of $296,072 in 2019.

Consequently, Operating Profit for the period declined 36% to $4.41 million (2019: $6.84 million). Operating profit for the quarter declined 7% to $3.77 million compared to $4.06 million recorded for the corresponding quarter of 2019.

Notably, share of profit of associate amounted to $3.29 million for the period relative to $3.13 million in 2019. ‘Preference Share Dividend’ decreased to $1.05 million (2019: $7.20 million).

Profit before tax amounted to $6.65 million versus the $26.75 million booked in 2019. Taxation decreased year over year by approximately 53% from $1.08 million in 2019 to $509,695.  As such, Net Profit amounted to $6.14 million, a 76% decline when compared to the $25.67 million in 2019. Net profit for the quarter amounted to $4.32 million relative to $22.23 million booked for the second quarter of 2019. The company indicated, “PIL’s top priority remains centred around continued growth of our Private Equity and Real Estate strategies through acquisitions and the protection of our stakeholders. The company has performed well due to the diversity of its portfolio companies which garners well for the resilience displayed during COVID 19.”

Net profit attributable to shareholders for the period amounted to $4.80 million relative to $23.79 million documented in 2019. For the quarter, net profit attributable to shareholders closed at $3.39 million (2019: $21.36 million). Total comprehensive income for the six months amounted to $26.76 million compared to $27.37 million reported for the prior financial year’s corresponding period.

Earnings per share (EPS) for the quarter amounted to $0.0077 (2019: $0.038), while the twelve months trailing EPS amounted to $0.0176. 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 November 16, 2020 at US$0.26 and $37.80 respectively.

Balance Sheet Highlights:

Total Assets as at September 30, 2020 amounted to $621.90 million (2019: $645.60 million), a 4% decline. The decline resulted from the Company booking $261.51 million in ‘Investment securities’ relative to $295.51 million in 2019. The Company also reported a decline in investment property which ended at $11.78 million relative to $25.86 million the prior year.

Shareholders’ Equity totalled $121.86 million relative to $113.94 million in 2019; as such book value per share now amounts to $0.19 (2019: $0.18).

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