April 27, 2020

QWI recorded losses from investment activities of $622.29 million for the period ended March 2020. While for the quarter, loss from investment activities amounted to $529.71 million versus gain from investment activities of $12.42 million in the prior comparable quarter.

In addition, Dividend and interest income amounted to $15.42 million as at March 2020. However, for the quarter, this amounted to $7.77 million (2019: nil).

Administrative expenses for the period amounted to $36.96 million, while finance costs amounted to $11.79 million. For the second quarter, administrative expenses was $6.64 million (2019: $ 3.34 million)  while finance cost closed at $6.07 million (2019: $27,479). Management noted, “The Company’s main expenses in the period were management fees paid to Jamaican Teas Ltd and interest expense on the company’s borrowings.”

As such, QWI ended the period with a loss before taxation of $655.65 million. While, for the second quarter, loss before tax amounted to $534.66 million compared to profit before taxation of $9.05 million reported in the prior corresponding quarter.

Consequently, net loss for the period totaled $576.41 million following tax credit of $79.24 million. The second quarter booked net loss of $481.93 million relative to net profit of $6.79 million documented in the same period last quarter.

Loss per share for the period amounted to $0.42 for the six months ended March 31, 2020, while the EPS for the second quarter was $0.35 (2019: $0.005). The total shares outstanding used for this calculation was 1,365,000,015. Additionally, QWI closed the trading the period on April 27, 2020 at a price of $0.77.

QWI noted that, “during the Company’s second quarter equities markets globally suffered steep declines and high volatility as the world witnessed the most wide-ranging impact that the Coronavirus has had on individuals, businesses and the investment markets.”

In addition, the Company highlighted that, “during the March quarter, stock market trends in Jamaica were very unfavourable. The main JSE Index fell by 25.6 percent, the Junior Market index declined by 31 percent and the JSE Combined Index lost 26 percent. This overall performance was characterised by moderate declines up to the end of February, followed by a steep collapse during March, then some modest recovery to end the period. The JSE main market index collapsed 29 percent between the end of February and 25th of March and the junior market was down 30 percent to the low on March 18th.”

Notably, Management stated that, “longer term, the trend in many securities prices will be heavily influenced by the continuing economic impact of COVID-19 and the ability of countries to recover from the current disruption to business. In the meantime the Company has continued to reduce its borrowings and is continuing to reposition its portfolio including holding of liquid funds to position us for future developments.”

Balance Sheet at a Glance:

As at March 31, 2020, total assets closed at $1.47 billion (2019: $461.30 million), a 219% increase. Of this increase, quoted investments (local) grew by 170% closing at $1.18 billion (2019: $436.52 million). In addition, quoted investments (overseas) and other receivables contributed to the increase amounting to $235.57 million (2019: nil) and $56.94 million (2019: nil), respectively.

The total equity as at March 31, 2020 amounted to $1.30 billion (2019: $451.79 million). This resulted in a net asset value per share of $0.95 (2019: $0.33).

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