March 1, 2024

Sterling Investments Limited (SIL) for the year ended December 31, 2023, reported a 1% decrease in Interest Income totaling $146.47 million compared to $148.18 million in the corresponding period last year. Interest Income for the fourth quarter had a 2% increase to close at $37.03 million compared to $36.22 million for the comparable quarter of 2022.

Management noted, “This was the result of asset sales/ maturities that were not immediately reinvested by management. This decision was intentionally taken to permit interest rates to find a peak before the purchase of new assets.”

Foreign exchange gains amounted to $30.03 million (2022: Loss of $30.27 million), this represents a decrease of 1% year over year. “The company maintains its current outlook that a long US dollar position is the safest and most rewarding long-term investment strategy for shareholders”, SIL noted.

Consequently, net loss on sale of debt investment securities at FVOCI decreased was $42.65 million compared to a gain of $6.58 million for the year ended December 31, 2022. The company booked a net loss on sale of debt investment securities at FVOCI of $38.44 million for the fourth quarter versus a gain of $524,635 reported for the similar quarter of 2022.

Total revenue increased by 8% to close at $133.85 million (2022: $124.48 million), while Total Expenses decreased by 68% from $82.50 million in 2022 to $26.62 million in the period under review. As a result, operating profit for the year amounted to $107.23 million, a 155% increase relative to $41.98 million reported in 2022.

Other Income for the year amounted to $183,613, a 75% decrease relative to $724,819 reported in 2022. Other Income for the fourth quarter amounted to $165,441 (2022: Loss of $5,653). For the period, manager’s preference share dividend amounted to $4.50 million (2022: nil).

Pretax Profit totalled $102.91 million, a 141% increase from the corresponding period last year. (2022: $42.71 million).

No taxation was recorded for the year, therefore Net Income for the year had a 141% increase to reach $102.91 million (2022: $42.71 million). Net income for the fourth quarter amounted to $23.76 million relative to $15.05 million in 2022.

Consequently, Earnings Per Share for the year amounted to $0.24 (2022: EPS: $0.10), while Earnings Per Share for the quarter totaled $0.05 (2022: EPS: $0.03). The number of shares used in these calculations was 432,279,067.

Notably, SIL’s stock price closed the trading period on February 29, 2024, at a price of $2.56 with a corresponding P/E ratio of 10.74x.

SIL highlighted, “Investors will continue to benefit from the US dollar income SIL’s portfolio generates through dividend payments. SIL’s exposure to the developed countries delivers a true source of diversification to shareholders. Management anticipates that the value of the securities within the portfolio will appreciate as interest rates come down. This offers shareholders the opportunity to experience real growth in the intrinsic value of their investment”.

Balance Sheet Highlights

The company’s assets totalled $1.82 billion (2022: $1.75 billion). This resulted from a 347% jump in ‘Cash and cash equivalents’ closing at $2.84 million.

Shareholder’s equity was $1.37 billion (2022: $1.27 billion), representing a book value per share of $3.17 (2022: $2.94).

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