November 16, 2021
Sterling Investments Limited (SIL) reported a 9% growth in total revenue to $184.94 million compared to $170.31 million recorded for the corresponding period in 2020. SIL noted, “This was driven primarily by increases in interest income and gains on sale of debt investment securities, the latter a result of increased profit taking in the portfolio.” Revenue for the third quarter fell 41% to $23.14 million compared to $38.99 million reported for the third quarter of 2020. Of total revenue:
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- Interest income for the nine months closed the period at $107.23 million, up 21% from the $88.82 million for the comparable period in 2020.
- Gain on disposal of available for sale securities for the period closed at $23.12 milliom relative to a loss of $730,486 twelve months earlier.
- There was no net gain on quoted equities for the period relative to a net gain of $1.94 million in 2020.
- Foreign exchange gain amounted to $54.59 million, a decrease of 32% compared to the gain of $80.28 million booked the prior year’s period.
The company experienced a 19% increase in total expenses for the period to close at $70.46 million (2020: $59.20 million) for the nine months ended September 30, 2020 and a 10% decrease for the third quarter to $20.16 million (2020: $22.28 million). The breakdown of total expenses for the period ended is as follows:
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- Interest expense totalled $10.21 million, 24% above last year’s corresponding period’s total of $8.22 million booked twelve months prior.
- Other expenses totalled $36.01 million, an increase of 29% (2020 $27.94 million).
- SIL booked $12.13 million for impairment loss on available for sale securities relative to a loss of $1.35 million recorded twelve months earlier.
- The Company booked unrealised fair value loss on equity investments securities at FVTPL of $12.12 million relative to a loss of $21.69 million the prior year.
Operating profit recorded for the period closed at $114.48 million relative to $111.11 million booked for the prior year’s corresponding period, a 3% increase year over year. Operating profit for the third quarter amounted to $2.98 million compared to $16.71 million reported for the same quarter of 2020.
Other Income recorded for the nine months period amounted to a gain of $190,096 relative to other gains of $2.88 million booked in 2020.
Preference dividend expense for the nine months amounted to $8.80 million compared to $12.80 million recorded in 2020.
Pre-tax profit totalled $105.87 million, 11% above the $95.43 million reported for the nine months ended September 30, 2020. Tax charges of $1.22 million (2020: $1.04 million) were booked for the period, and as such, net profit amounted to $104.65 million (2020: $94.39 million), an 11% increase. Profit for the third quarter amounted to $312,647 million relative to $19.98 million booked in 2020.
Total comprehensive income for the nine months amounted to $139.95 million compared to $11.95 million booked for the similar period of 2020. For the quarter, total comprehensive loss amounted to $32.02 million (2020: total comprehensive gain of $62.64 million).
Earnings per share for the nine months period and third quarter amounted to $0.25 (2020: $0.23) and $0.001 (2020: $0.05) respectively. The trailing twelve months earnings per share amounted to $0.345. The total number of shares used in the calculations amounted to 418,608,941 units. Additionally, SIL’s stock price closed at $2.80 as at the end of trading on November 15, 2021.
Balance Sheet Highlights:
As at September 30, 2021, the company’s assets totalled $2.17 billion, 28% more than $1.70 billion a year ago. SIL comments, “Total assets increased 27.7% from J$1. 7 billion as at September 30, 2020 to J$2.2 billion as at September 30, 2021 reflecting the growth in value of the existing portfolio and the acquisition of assets.” The corresponding line item affected was ‘Investment Securities’ which closed at $2.13 billion, 28% higher than the $1.67 billion booked as at September 30, 2020.
Shareholder’s equity as at September 30, 2021, closed at $1.53 billion compared to $1.21 billion in 2020. The book value per share amounted to $3.65 (2020 $2.91).
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