SML reports 10% decline in first quarter net profit.

May 19, 2020

Stanley Motta Limited (SML), for the three months ended March 31, 2020 booked a 10% increase in revenue to total $112.02 million compared to $101.61 million for the same period in 2019. The Company mentioned that, “due to an increase in rental space and the devaluation of Jamaican dollar to the US dollar over the same period which moved from an average of J$125.0 to US$1 at 31st of March 2019 to an average of J$134.0 to US$1.0 at the 31st of March 2020.”

Other operating income decrease by 82% to close at $5000 relative to the $28,000 that was documented the quarter in 2019.

Administrative expenses amounted to $36.07 million (2019: $18.64 million). The Company noted this was attributed, “primarily SEZ fees and associated SEZ expenses paid in 2020 ($3.1m); additional depreciation costs associated with capital works done in the previous year ($1.6m); an unexpected expense in repairs and maintenance ($2.3M); and additional rent and expenses for space that we are now subletting ($4m), and timing related booking of expenses ($2m). The administrative expenses in Q1 2019 had been offset by a $5m forex gain in 2019 which was only $2m in 2020. Aside from the depreciation and the additional rent, these are not expenses that will be repeated in the next 3 quarters.”

This translated into operating profit declined of 8% to $75.96 million when compared to last year’s $83 million. SML noted, “Net operating income is expected to increase as the company begins to benefit from the increased rental income from additional rental space.”

Finance costs of $10.36 million was recorded for the period under review (2019: $11.33 million). As such, profit before tax decreased to $65.60 million for the quarter ended March 2020 relative to $71.67 million documented in the same period last year.

Taxation increase 105% to close at $2.39 million (2019: $1.17 million) for the three months ended March 2020.

Consequently, net profit for the quarter totalled $63.21 million (2019: $70.50 million). Total comprehensive income of $81.15 million was reported for the period versus $82.68 million recorded in the prior corresponding period. The Company noted that, “The quarter ended with a strong net profit margin of 56.4%, reflecting increased operational efficiencies and timely collection of rent.”

Earnings per share (EPS) for the period totalled $0.08 (2019: $0.09). The trailing twelve months EPS amounted to $0.36 The number of shares used in our calculations amounted to 757,828,490 units. SML’s stock price closed the trading period on May 18, 2020 at $5.03.

Balance Sheet at a glance:

As at March 31, 2020, total assets amounted to $4.97 billion, up from $4.81 billion booked twelve months earlier. The increase in total assts was mainly due to the increase in ‘Investment Property’ which closed at $4.81 million (2019: $4.68 million) resulting in a 3% or $160.73 million year over year.

Shareholders’ Equity of $4.08 billion (2019: $3.95 billion) which resulted in a book value per share of $5.39 (2019: $5.22).

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