SML reports 11% decrease in nine months net profit

November 20, 2020

Stanley Motta Limited (SML) for the nine months ended September 30, 2020, booked a 10% increase in revenue to total $344 million compared to $312.44 million for the same period in 2019. For the third quarter revenue increased 11% to $117.82 million in 2020 compared to $106.24 million the previous year. The company noted, “these increases are mainly attributable to the devaluation of the Jamaica dollar which moved from an average of J$136.69:1US$ as at 30th September 2019 to J$143.95:1US$ as at 30th September 2020.”

Administrative expenses amounted to $163.17 million (2019: $109.94 million), while other operating income totalled $5.27 million (2019: $747,000). SML noted that the increase in administrative expenses was due to, “a significant FX loss of J$48.74M arising from the evaluation of our DBJ loan, SEZ fees, and repairs & maintenance and additional requirements based on our response to COVID 19.”

This translated into operating profit declining to $186.09 million when compared to last period’s $203.25 million. For the quarter, operating profit went up by 8% to close the period at $67.95 million (2019: $62.95 million).

Finance costs of $32.66 million (2019: 34.81 million) was recorded for the period. For the quarter, finance cost amounted to $11.07 million (2019: $11.52 million).

As such, profit before tax fell to $153.43 million for the period ended September 30, 2020 relative to $168.44 million in 2019. As for the quarter, profit before tax closed the period at $56.88 million versus $51.43 million in the prior corresponding quarter.

Net profit for the period totalled $148.18 million (2019: $165.49 billion) after incurring taxes of $5.24 million (2019: $2.95 million). While for the quarter, net profit of $55.15 million was recorded (2019: $49.66 million).

Total comprehensive income of $224.06 million (2019: $192.53 million) while for the quarter, SML reported total comprehensive income of $80.79 million in 2020 relative to $76.69 million in 2019.

Earnings per share (EPS) for the period totalled $0.20 (2019: $0.22). EPS for the third quarter amounted to $0.07 (2019: $0.07). The twelve months trailing EPS amounted to $0.35.The number of shares used in our calculations amounted to 757,828,490 units. SML’s stock price closed the trading period on November 20, 2020 at $5.65, with a corresponding P/E of $16.25 times.

The company stated, “We expect little fluctuations in our results through to the end of the financial year, based around earning rent in US$, continuing with close to 100% occupancy and maintaining the status quo until year end.”

Balance Sheet at a glance:

As at September 30, 2020, total assets amounted to $5.08 billion, up from the balance of $4.87 billion in 2019. The increase in total assets was as a result of the increase in ‘Investment Property’ which increased to $4.89 billion in 2020 from $4.75 billion in 2019.

Shareholders’ Equity of $4.18 billion was reported (2019: $3.99 billion) which resulted in a book value per share of $5.52 (2019: $5.27).


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.