SIL reports 35% decrease in first quarter net profit

Sterling Investments Limited (SIL) for the three months ended March 31, 2022, reported a 55% decrease in total revenue to $36.59 million compared to $80.43 million recorded for the corresponding period in 2021.

    • Interest income closed the period at $39.64 million, up 13% from the $35.13 million for the comparable period in 2021. Management noted, “The company is continuing to benefit from a larger portfolio and the higher yields it locked in during the 2020 and 2021 market volatility”
    • Net gain on sale of debt investment securities at FVOCI for the period decreased by 71% to $4.94 million, from the $16.89 million recorded the prior year.
    • Foreign exchange loss amounted to ​$7.99 million, relative to a gain of $28.41 million booked the prior year’s period.

The company experienced a 96% decrease in total expenses for the period to total $948,882 (2021: $24.70 million) for the quarter ended March 31, 2021. This was as a result of the following:

    • Interest expense totaled $3.53 million (2021: $3.03 million).
    • Other operating expenses totaled $10.78 million (2021: $12.58 million), down 14% year over year.
    • SIL booked an impairment gain on financial instruments of $168,254 relative to the loss of $8.47 million for the corresponding quarter in 2021.
    • The Company booked ‘Unrealised fair value gain on equities and structured notes at FVTPL’ of $13.19 million compared to a loss of $621,218 for the first three months of 2021.

Operating profit recorded for the period closed at $35.64 million relative to a profit of $55.73 million booked for the prior year.

Other income for the quarter increased to $521,523 for the period under review from  $19,250 reported in 2022 .

Pretax profit amounted to $36.17 million (2021: $55.75 million), reflecting a 35% decrease.

The was no tax charges (2021: $519,831) booked for the first three months and as such, net profit amounted to $36.17 million, relative to 2021’s first quarter net profit of $55.23 million.

Total comprehensive loss for the quarter amounted to $102.96 million compared to an income of $45.68 million booked for the similar quarter of 2021.

Earnings per share for the period amounted to $0.08 relative to an EPS of $0.13 in 2021. The trailing twelve months earnings per share amounted to $0.33.  The total number of shares used in the calculations amounted to 432,664,459 units. Additionally, SIL’s and SILUS stock price closed at J$2.90 and US$0.02 as at the end of trading on May 13, 2022 with a corresponding P/E of 8.91 times.

Management noted, “The investment manager has actively reduced the duration of the investment portfolio and maintains a strong liquidity position. Interest rates are expected to rise significantly over the next few months and the market prices for many financial assets are likely to decline. This will create buying opportunities for investors and the company. SIL thrives in times of crisis and is cautiously and patiently assessing the market for undervalued investments.”

Balance Sheet Highlights:

As at March 31, 2022, the company’s assets totaled $2.10 billion, 3% more than $2.03 billion a year ago. This resulted mainly from an increase in ‘Investment Securities’ which closed at $2.06 billion, 3% more than the $2 billion booked as at March 31, 2021.

Shareholder’s equity as at March 31, 2022, stood at $1.43 billion compared to $1.46 million in 2021. The book value per share as at March 31, 2022 amounted to $3.47 (2021: $3.53).


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