SelectF reports six months net loss of $1.80 billion

August 11, 2020

Sagicor Select Funds Limited (SELECTF), for the six months ended June 30, 2020 reported net investment loss of $1.78 billion relative to an income of $434.19 million booked June 30, 2019. As for the quarter, net investment loss amounted to $318.54 million relative to an income of $415.97 million booked last year same time.

Fees and other income closed the six months period at 562,000 (2019: nil) and the second quarter at $530,000 (2019: nil).

As such, total loss for the period under review equated to $1.78 billion, as for the six months of 2019, total revenue amounted to $434.19 million. However, at the end of the second quarter total loss closed at $318.01 million, while June 2019 quarter booked an income of $415.97 million. Management noted, “The fund primarily earns income from dividends. For the quarter dividend income was J$16.6 million, this was lower than previous quarters due to the impact of COVID-19. The central bank’s decision to suspend dividend payments by deposit-taking institutions as well as companies reserving payments to buffer their cash holdings due to possible fall-out were among factors that led to reduced dividend earnings.”

Total expenses for the six months period closed at $21.07 million (2019: $22.54 million), while for the quarter, total expenses totalled $5.73 million (2019: $21.14 million). The company explained that, “Total expenses for June quarter amounted to J$5.7 million. The cost was largely comprised of management fees and trustee fees of J$3.0 million and J$1.6 million, respectively.”

Consequently, net loss closed the six months period at $1.80 billion, compared to a net profit of $411.65 million reported for the six months ended June 30, 2019. However, at the end of the second quarter net loss closed at $323.74 million relative to a profit of $394.82 million. SELECTF noted that the quarter net profit, “outturn was due to unrealised depreciation in value of investments of J$334.9 million. The fund holds securities listed on the JSE and the value of these stocks reflected the overall market conditions that prevailed during the quarter.”

Loss per share for the period under review amounted to $0.35, while for six months of 2019, earnings per share totalled $0.37. For the quarter, LPS amounted to $0.06 (2019: EPS of $0.36). the trailing twelve months loss per share amounted to $0.24. The number of shares used in this calculation was 5,100,000,000 shares. SELECTF last traded at a price of $0.69 on August 10, 2020.

Balance Sheet Highlights:

Total assets, as at June 2020, amounted to $4.15 billion (2019: $2.72 billion). Of this, ‘Financial assets at fair value through profit or loss totalled $4.05 billion (2019: $2.48 billion), while Cash and Cash Equivalents closed at $103.31 million (2019: $234.08 million).

SelectF, as at June 30, 2020, booked shareholders’ equity of $4.14 billion versus $1.51 billion booked in 2019. Book value per share amounted to $0.81 (2019: $0.30).



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