SIL books 29% decline in nine months net profit

Sterling Investments Limited (SIL) for the Nine Months Ended September 30, 2017 reported a 17% decrease in total revenue to $93.24 million compared to $112.50 million in 2015. Total revenue for the quarter increased 7% to close at $31.14 million compared to $28.99 million for the corresponding quarter of 2016. Of total revenue:

Interest income closed the period at $58.55 million, up from $55.29 million for the comparable period in 2016.

Gain on disposal of available for sale securities amounted to $23.23 million, up $18.46 million when compared to $4.78 million recorded the prior year. SIL noted this was, “As a result of the strategy employed to increase trading activity in the portfolio.

Foreign exchange gains fell to $11.46 million compared to $52.43 million booked the prior year’s period. SIL indicated that the decrease was due to, “the lower rate of depreciation of the Jamaican dollar, which led to a 78.1% reduction in unrealized foreign exchange gains.”

The company experienced a 3% increase in total expenses to total $25.36 million (2016: $24.60 million). This resulted from increases in both other operating expenses and interest expense to $21.66 million (2016: $18.95 million) and $5.61 million (2016: $3.55 million). SIL booked an impairment loss on available for sale securities of $2.14 million versus a gain of $2.30 million for the nine months ended September 30, 2017.

Operating profit recorded for the period amounted to $67.88 million relative to $87.89 million booked for the prior year. Operating profit for the quarter closed at $20.53 million, a 6%  decline year over year from $21.91 million.

Other income declined from $4.15 million in 2016 to a loss of $6,106 for the nine months ended September 30, 2017.

Preference dividend expense for the nine months totalled to $8.30 million, a decrease of 5% relative to $8.75 million last year.

Tax charges of $581,966 (2016: $610,206) was booked for the period and as such, net profit for the period amounted to $58.99 million (2016: $82.69 million). Net profit for the quarter amounted to $16.03 million relative to $19.49 million reported for the comparable quarter in 2016.

Total comprehensive income for the nine months closed at $88.26 million compared to $115.17 million. Total comprehensive income for the quarter amounted to $34.50 million (2016: $37.88 million).

This resulted in earnings per share of $1.00 relative to $1.41 in 2016. EPS for the quarter amounted t0 $0.27 compared to $0.33 in 2016, while the twelve month trailing EPS is $0.93. Additionally, SIL’s stock price closed at $12.25 as at the end of trading on November 14, 2017.


Balance Sheet Highlights:

As at September 30, 2016, the company’s assets totaled $1.23 billion, 24% more than $986.76 million a year ago. This resulted mainly from an increase in investment securities which closed at $1.19 billion, 25% higher than the $950.34 million booked as at September 2016. SIL noted, “This was funded primarily by a combination of greater use of margin, retained earnings, the Dividend Reinvestment Programme (DRIP) and the Complementary Share Purchase Programme (CSPP).”

Shareholder’s equity as at September 30, 2017 stood at $894.55 million compared to $790.64 million. The book value per share amounted to $15.20 (2016: $13.44).


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