SML reports 15% decrease in first quarter net profit

 May 13, 2022

Stanley Motta Limited (SML), for the three months ended March 31, 2022 booked a 5% increase in revenue to total $126.02 million compared to $119.64 million for the same period in 2021. The Company mentioned that, “the increase is attributable to the depreciation of the Jamaican dollar which moved from an average of J$147.86:US$1 as at 31st March 2021 to J$156.06:US$1 at 31st March 2022. The company didn’t earn rental income from Unit 1 during the quarter as preparations were being made for the expansion of the space into a new, 126,000 square feet state-of-the-art building.”

Other operating income increased to $8.34 million relative to the $1.93  that was documented the quarter in 2021.

Administrative expenses amounted to $66.79 million (2021: $55.44 million). The Company noted this was attributed, “to a significant FX (foreign exchange) loss from J$55.4M to J$66.8M arising from the revaluation of the USD denominated loan. The company refinanced the USD Loan for a JMD loan with a local financial institution which will eliminate the FX losses incurred in the past which have average at around J$45M per year”

This translated into 2% increase in operating profit to $67.57 million when compared to last year’s $66.14 million.

Finance costs of $20.37 million was recorded for the period under review (2021: $10.81 million), “the company incurred new fess in the first quarter during the refinancing which included processing and commitment fees” as per SML. As such, profit before tax decreased to $47.20 million for the quarter ended March 2022 relative to $55.33 million documented in the same period last year.

Taxation increased by 25% to close at $1.30 million (2021: $1.03 million) for the three months ended March 2022.

Consequently, net profit for the quarter totalled $45.91 million (2021: $54.30 million).

Total comprehensive income of $31.97 million was reported for the period versus $109.58 million recorded in the prior corresponding period.

Earnings per share (EPS) for the period totalled $0.06 (2021: $0.07). The trailing twelve months EPS amounted to $1.19. The number of shares used in our calculations amounted to 757,828,490 units. SML’s stock price closed the trading period on May 12, 2022 at $5.09 with a corresponding P/E of 4.27 times.

The Company noted that, “The company looks to progressive development on its Unit 1 building project which it expects to significantly boost company revenue and profits, while improving shareholder value in the future.”

Furthermore SML noted, “Utility and security expensed at the start of April 2022 which was influenced by higher oil prices and increases in compensation respectively. There is currently a substantial rise in inflationary cost across the globe.” Additionally, “the company was able to secure an additional three lease term on 50,000 square feet of space which was subject to a 25% increase in rental that became effective on April 1, 2022.”


Balance Sheet at a glance:

As at March 31, 2022, total assets amounted to $6.58 billion, up from $5.85 billion booked twelve months earlier. The increase in total assets was mainly due to the increase in ‘Investment Property’ which closed at $6.19 billion (2021: $5.54 billion) resulting in a 12% or $651.02 million year over year. Additionally, there was 100% increase in Rights of Use Asset to $205.65 million (2021: $102.78 million).

Shareholders’ Equity of $5.38 billion (2021: $4.78 billion) which resulted in a book value per share of $7.10 (2021: $6.31).


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