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).

 

Disclaimer:

Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.

 

 

 

 

 

 

 

2018-08-03T22:10:21+00:00