November 16, 2022

Figures are quoted in United States dollars (except where it is indicated otherwise):

Proven Investments Limited (PROVEN), for six months ended September 30, 2022 reported net interest income of $6.53 million (2021: $2.01 million), a 225% improvement year over year. For the quarter, it increased 259% to $3.81 million (2021: $1.06 million). Of the six-month net interest income:

• Interest income increased 163% to $14.25 million (2021: $5.41 million)
• Interest expense increased 127% to $7.71 million (2021: $3.40 million).

Losses on securities trading amounted to $104,703 (2021: gains of $1.55 million).

Dividend income declined 26% to $65,128 (2021: $88,034), while fees & commission income increased 45% to $5.95 million (2021: $4.11 million).

Foreign exchange translation gains declined 80% to $110,186 (2021: $562,080).

Net gross income from manufacturing increased 90% to $9.61 million (2021: $5.05 million).

Pension management income declined 2% to $1.65 million (2021: $1.68 million).

Other income increased 73% to $4.50 million (2021: $2.61 million).

Consequently, net revenue increased 60% to $28.32 million (2021: $17.65 million). For the quarter, it amounted to $13.19 million (2021: $11.15 million).

Operating expenses increased 96% to $30.67 million (2021: $15.62 million). Of this:

Administrative and general expenses increased 90% to $26.83 million (2021: $14.14 million).

Depreciation and amortization increased 107% to $2.82 million (2021: $1.36 million).

IFRS 9 provisioning gain increased 809% to $1.03 million (2021: $113,332).

Consequently, operating loss amounted to $2.35 million (2021: profit of $2.03 million). For the quarter, operating loss amounted to $2.95 million (2021: profit of $2.33 million).

Share of profit of associates declined 33% to $4.76 million (2021: $7.11 million). Preference share dividend declined 131% to $373,636 (2021: $1.20 million).

As such, profit before tax amounted to $2.78 million (2021: $7.94 million). Taxation increased 99% to $1.18 million (2021: $593,050).

As such, net profit amounted to $1.60 million (2021: $7.35 million), a 78% decline year over year. For the quarter, net loss amounted to $592,665 (2021: profit of $5.64 million).

Net profit attributable to shareholders declined 71% to $1.71 million (2021: $5.99 million). For the quarter, net loss attributable to shareholders closed at $33,858 (2021: profit of $4.43 million). Management noted that “this net profit outcome largely reflects the adverse impact on asset prices caused by an increasingly inflationary environment, accompanied by rising interest rates. Grain price increases over the period along with the integration of newly acquired companies were the other drivers influencing the performance for the period.”

“Despite these challenging headwinds, the business remains resilient and is already reaping the results of its strategic initiatives based on the initial 3rd quarter to date performance”, as per PROVEN.

Total comprehensive loss amounted to $18.45 million (2021: income of $8.65 million). For the quarter, total comprehensive loss amounted to $2.40 million (2021: income of $4.05 million).

Earnings per share (EPS) for the period amounted to $0.0021 (2021: $0.0075), while for the quarter the LPS amounted to $0.00004 (2021: EPS of $0.0055). The twelve-month trailing EPS amounted to $0.0103. The number of shares used in our calculations is 801,732,000. Notably, the stock price for PROVEN and PROVENJA closed the trading period on November 15, 2022 at US$0.20 and J$29.30 respectively with a corresponding P/E ratio of 19.41 times and 18.61 times respectively.

Balance Sheet Highlights:

Total Assets as at September 30, 2022 amounted to $1.08 billion (2021: $741.05 million), a 46% increase year over year. The growth resulted mainly from the 607% increase in ‘Loans Receivable’ to $239.66 million ($33.91 million).

Shareholders’ Equity declined 26% to $123.47 million (2021: $167.15 million) with a book value per share of $0.16 (2021: $0.22).

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