SIL reports 20% increase in six months net profit

Sterling Investments Limited (SIL) for the six months ended June 30, 2018, reported a 25% growth in total revenue to $77.83 million compared to $62.10 million recorded for the corresponding period in 2017. Revenue for the second quarter rose 56% to $46.39 million compared to $29.65 million reported for the second quarter of 2017. Of total revenue:

  • Interest income for the six months closed the period at $41.66 million, up 10% from the $37.92 million for the comparable period in 2017.
  • Loss on disposal of available for sale securities for the period amounted to $232,217 relative to a gain of $21.42 million.
  • Unrealised loss on quoted equities for the period amounted to $1.99 million (2017: Nil).
  • Foreign exchange gain amounted to $38.40 million, a gross increase of 1290% compared to the gain of $2.86 million booked the prior year’s period. SIL noted, “The Jamaican dollar depreciated against the US dollar by J$5.40 or 4.3% for the six-month period ended June 2018, relative to the same period in 2017 when it depreciated by J$0.18 or 0.1%.”

The company experienced an 8% increase in total expenses for the period to close at $15.99 million (2017: $14.75 million) for the six months ended June 30, 2018 and a 122% growth in expenses for the second quarter to $9.65 million (2017 $4.35 million). The breakdown of total expenses are as followed:

  • Interest expense totalled $4.80 million, 52% above last year’s corresponding period’s total of $3.15 million.
  • Other expenses totalled $14.26 million, a contraction of 4% (2017: $14.78 million).
  • SIL booked a gain of $3.07 million for impairment on available for sale securities relative to $3.58 million twelve months earlier.
  • The Company booked no unrealised gain on derivative relative to the gain of $392,078 for the corresponding period in 2017.

Operating profit recorded for the period closed at $61.84 million relative to $47.36 million booked for the prior year, a 31% increase year over year. Operating profit for the second quarter amounted to $36.75 million compared to $25.29 million reported for the same quarter of 2017.

Other income for the period grossly improved from a loss of $6,331 booked in 2017 to $59,381.

Preference dividend expense for the six month amounted to $9.61 million compared to $4 million recorded in 2017.

Pre-tax profit totalled $52.30 million, up 21% from the $43.35 million reported for the first six months of 2017. Tax charges of $545,356 (2017: $387,215) was booked for the period and as such, net profit amounted to $51.75 million (2017: $42.96 million), a 20% or $8.79 million increase. Profit for the second quarter amounted to $26.91 million relative to $24.59 million booked in 2017.

Total comprehensive income for the six months amounted to $51.55 million compared to $53.76 million booked for the similar period of 2017.

Earnings per share for the six months period and second quarter amounted to $0.85 (2017: $0.70)  relative to $0.44 (2017: $0.40) respectively. The trailing twelve months earnings per share amounted to $1.03.  The total number of shares used in the calculations amounted to 59,370,882 units. Additionally, SIL’s stock price closed at J$13.50 as at the end of trading on August 03, 2018.


Balance Sheet Highlights:

As at June 30, 2018, the company’s assets totalled $1.25 billion, 15% more than $1.08 billion a year ago. This resulted mainly from an increase in ‘Investment Securities’ which closed at $1.20 billion, 17% higher than the $1.03 million booked as at  June 30, 2017.  SIL indicated that, “This was funded by a combination of an increase in the margin as well as the Dividend Reinvestment Programme (DRIP) and Complementary Share Purchase Programme (CSPP). As at June 2018, margin loans totalled J$346.8 million, or 28.8% of the total portfolio of investment securities compared to 18.5% for June 2017. The company’s use of margin has boosted the income of the portfolio.”

Shareholder’s equity as at June 30, 2018, stood at $877.73 million compared to $875.82 million in 2017. The book value per share amounted to $14.34 (2017: $14.31).



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