SIL reports 34% decline in year end net profit

March 01,2108

Sterling Investments Limited (SIL) for the year ended December 31, 2017, reported a 35% decline in total revenue to $91.98 million compared to $141.43 million recorded for the corresponding period in 2016.

Of total revenue:
Interest income closed the period at $79.08 million, up 1.3% from the $78.10 million for the comparable period in 2016.  The company noted this occurred “despite declining yields in the bond market”.

Gain on disposal of available for sale securities for the period grossly increased to $37.82 million, a 272% or $27.6 million increase relative to the $10.17 million recorded the prior year. SIL noted, “The Company immediately took steps to reduce the impact of the 2017 JMD appreciation by increasing trading gains.”

Foreign exchange loss amounted to $26.24 million compared to the gain of $53.16 million booked the prior year’s period. SIL indicated that the decrease was primarily due to, “The appreciation of the Jamaican dollar which we do not expect to continue in 2018.”

The company experienced a 24% decline in total expenses to total $37.59 million (2016: $49.39 million) for the year ended December 31, 2018. This resulted from decreases in two expenses categories.

Interest expense totaled $7.64 million (2016: $4.76 million).

Other expenses totaled $28.40 million, an increase of 15% (2016: $24.74 million).

SIL booked an impairment loss on available for sale securities of $1.16 million relative to $18.7 million for the corresponding period in 2016.

Unrealised loss on derivative amounted to $392,078 (2016: $1.11 million).

Operating profit recorded for the year closed at $54.38 million relative to $92.04 million booked for the prior year. Operating loss for the quarter closed at $13.5 million, an 87% decline when compared with same period for 2016.

Other income for the period grossly declined from $422,338 to $1,087, a 100% or $421,251 decrease.

Preference dividend expense for the year ended December 31, 2017, totaled to $1.9 million, a decrease of 86% relative to $13.28 million last year.

Tax charges of $808,586 (2016: $591,937) was booked for the year and as such, net profit amounted to $51.68 million (2016: $78.60 million), a 34% or $26.92 million decline.  Net loss for the quarter amounted to $7.32 million relative to the loss of $4.09 million reported for the comparable quarter in 2016.

Total comprehensive income for the year amounted to $58.08 million compared to $120.48 million booked for 2016.

This resulted in earnings per share of $0.88 relative to $1.34 in 2016. Loss per share for the quarter amounted to $0.12 compared to a loss per share of $0.07 in 2016. Additionally, SIL’s stock price closed at J$13.00 as at the end of trading on February 28, 2018.

Balance Sheet Highlights:

As at December 31, 2017, the company’s assets totaled $1.17 billion, 20% more than $974.70 million a year ago. This resulted mainly from an increase in ‘Investment Securities’ which closed at $1.11 billion, 18% higher than the $938.6 million booked as at December 31, 2016.  SIL indicated that “Prices of assets in the portfolio rose significantly, allowing the team to realize some of the gains on its investments. The company started to make selective equity purchases towards the end of the year.”

Shareholder’s equity as at December 31, 2017 stood at $866.52 million compared to $810.43 million in 2016. The book value per share amounted to $14.73 (2016: $13.77).


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