November 17, 2020
Sagicor Select Fund Manufacturing & Distribution (SELECTMD) for the nine months ended September 30, 2020 reported net investment loss of $890.15 million relative to net investment income of $34.32 million. While for the quarter net investment loss closed at $53.43 million compared to net investment income of $34.32 million. Dividend income totalled $48.93 million for the nine months and $17.65 million for the quarter. Whereas, other net changes in fair value amounted to a loss of $940.62 million for the nine months relative to an income of $34.32 million in 2019. For the quarter, other net changes in fair value amounted to a loss of $71.50 million relative to an income of $34.32 million in the corresponding quarter of 2019.
Fees and other income closed the nine months period at $1.55 million and the third quarter at $426,000. Net foreign currency gains/ losses and other income amounted to $58,000 for the nine months and $30,000 for the quarter.
As such, total loss for the period under review equated $890.09 million relative to total income of $34.32 million. The total loss for the quarter amounted to $53.40 million relative to total income of $34.32 million twelve months earlier. The Company highlighted, “the fund earned J$17.6 million from dividend income for the quarter. This outturn was relatively flat compared to the previous quarter, despite an increase in the number of companies that paid dividends. The impact of COVID-19 on profits has impacted dividend pay-out, as some companies reduced pay-out during the third quarter relative to previous quarters. Of note is that some companies are still reserving dividend payments to buffer their cash holdings due to possible fallout in the future. The companies within the sector that provide household items may not be adversely impacted by the global pandemic.”
Total expenses for the nine months period closed at $22.55 million (2019: $10.11 million), while for the quarter, expenses amounted to $8.25 million (2019: $10.11 million). Management noted that, “the cost was largely comprised of management fees and transaction costs. During the quarter, the fund continued to acquire holdings to improve the portfolio weightings. The lower stock prices continue to provide opportunity to increase holdings at lower cost. Additionally, some of the holdings in Derrimon Trading Limited (DTL) were sold as the weighting of DTL in the portfolio was above the index. This led to portfolio weightings moving closure toward index weighting during the quarter.”
Consequently, net loss closed the nine months period at $912.64 million relative to a net profit of $24.22 million last year. Whereas, the quarter net loss amounted to $61.64 million versus the net profit of $24.22 million booked last year. The company noted, “the outturn for Q3 of 2020 was primarily due to unrealised depreciation in the value of investments. This reflected a decline in some prices of listed manufacturing and distribution companies relative to the end of June 2020. This was evidenced by a fall in the value of the JSE Manufacturing & Distribution index by 3.9% relative to the end of June 2020.”
Loss per share for the period under review amounted to $0.24 relative to an EPS of 0.01 in 2019, while for the quarter, SelectMD booked LPS of $0.02 versus an EPS of $0.01 in 2019. Trailing LPS amounted to $0.20. The number of shares used in this calculation was 3,816,612,000 shares. As at November 16, 2020 the stock traded at $0.70.
Balance Sheet Highlights:
Total assets, as at September 30, 2020, amounted to $3.04 billion (2019: $1.14 million). Of this, Cash and Cash Equivalents booked $108.12 million (2019: $109.48 million), while Financial assets at fair value through profit or loss totalled $2.93 billion (2019: $1.03 billion). Additionally, Receivables and tax recoverable amounted to $105,000 (2019: nil).
Total equity as at September 30, 2020 amounted to $3.03 billion (2019: $1.12 billion), resulting in a net asset value per share of $0.79 (2019: $0.29).
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