QWI reports year end net loss of $452.97 million

November 03, 2020

QWI Investments Limited, for the year ended September 2020, reported losses from investment activities of $490.81 million relative to a gain of 389.50 million last year. For the quarter, gain from investment activities of $31.05 million was recorded(2019: $256.12 million).

Unrealized currency translation and dividend income closed the year at $3.30 million (2019: nil) and $24.82 million (2019:$4.99 million), respectively. While, for the quarter, unrealized currency translation amounted to $11.56 million (2019: nil), whereas, dividend income closed at $5.08 million (2019: $3.26 million).

Administrative and other expenses amounted to $41.88 million (2019: $51.07 million), however, for the quarter ended September 2020, administrative expenses fell to close at $10.15 million (2019: $33.67 million). Operating loss amounted to $511.16 million for the year under review relative to an operating profit of $343.42 million in 2019. For the quarter, operating profit was $14.42 million (2019: $225.70 million).

Interest expenses, for the year, rose totaling $19.62 million (2019: $12.55 million). For the quarter, interest expense closed at $5.50 million relative to $9.51 million last year.  Management stated that, “The Company’s main expenses, during the fourth quarter and the year, were management fees paid to Jamaican Teas and interest expense on the Company’s borrowings. Added to these expenses was a foreign exchange translation loss in the quarter of almost $12 million. Investment decisions are overseen by the members of QWI’s investment committee who are paid an incentive fee, based on the performance of the Company. During the year, no investment fees were incurred.”

As such, loss before taxation year closed at $530.79 million relative to a pre-tax profit of $330.87 million last year. For the quarter, QWI posted profit before taxation of $8.93 million (2019: $216.20 million). QWI noted that for the profit in the fourth quarter, “mainly emanated from gains of $30 million on our overseas share portfolios and some dividend income.” Whereas, for the loss before tax for the year was “due primarily to losses on the Jamaican portfolio of $524 million and $43 million in gains on the overseas portfolios. Dividend income earned for the year amounted to $20 million, offset by operating expenses,” as per QWI.

For the year ended September 2020, QWI recorded tax credit of $77.82 million (2019 tax charge: $82.26 million), thus resulting innetloss for the year under review of $452.97 million (2019 profit: $248.60 million). Notably, for the quarter, QWI recorded profit for the period of $8.08 million versus $136.45 million reportedfor the quarter endedSeptember 2019.

Loss per share amounted to $0.33 for the year ended September 30, 2020, relative to an earnings per share of $0.18 while the EPS for the fourth quarter was $0.01 (2019: $0.10). The total shares outstanding used for this calculation was 1,365,000,015. Additionally, QWI closed the trading the period on November 3, 2020 at a price of $0.74.

Balance Sheet at a Glance:

As at September 30, 2020, total assets closed at $1.63 billion (2019: $2.56 billion), a 36% decrease. Of this decrease, quoted investments (local) fell by 11% closing at $1.21 billion (2019: $1.36 billion). In addition, accounts receivables contributed to the decrease amounting to $880.77 million (2019: $1.20 billion), respectively. Whereas, quoted investments (overseas) amounted to $417.44 million (2019: nil).

The total equity as at September 30, 2020 amounted to $1.42 billion (2019: $1.87 million). This resulted in anet asset value pershare of $1.04 (2019: $1.37).

Analyst Certification The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.