July 18, 2022
Sygnus Real Estate Finance Ltd for the nine months ended May 31, 2022, reported Interest Income of $152.70 million, a 118% increase when compared to the $70.16 million reported in 2021. During the third quarter, SRF generated $58.52 million of interest income a 127% increase from the $25.82 million stated in previous third quarter. Interest expense for the period amounted to $101.33 million, a 91% increase relative to the $53.13 million reported a year earlier, while Interest Expense for the third quarter amounted to $35.87 million a 75% increase compared to the $20.48 million booked twelve months earlier. Net Interest Income for the period totalled $51.37 million an increase of $34.34 million compared to the $17.02 million reported in the previous period. For the quarter, SRF generated $22.65 million of net interest income a 325% increase from the $5.33 million reported in the corresponding quarter a year prior.
SRF noted, “The undulating impact of the global COVID-19 pandemic on economies and the global supply chain has been compounded by the war between Russia and the Ukraine, has triggered an inflationary spiral which is impacting the global economy, and Jamaica, where all of SRF’s investment assets are located for the time being. Although the health risks from COVID-19 have substantially abated, bouts of mutation with new COVID-19 variants continue to represent a significant health threat. Commodity prices, which escalated to record levels during the early part of 2022 have since receded substantially with global steel prices down more than 40% for their 2022 peak and lumber prices down 50% from their 2022 peak as rising inflation, chased by rising interest rates, have increased concerns of demand destruction in multiple economic sectors.”
Fair value gains from financial instruments (FVTPL) at fair value through profit for the period closed at $22.90 million a 52% decrease relative to $47.63 million reported a year earlier. Foreign exchange losses for the period amounted to $8.14 million compared to the foreign exchange gain of $43.85 million the previous year.
Other Income for the period amounted to $8.66 million an increase of $5.47 million from the $3.19 million stated the previous year.
Operating Expenses for the nine months period jumped to $272.41 million, an 82% increase from the $150.01 million reported in 2021. Of this:
Management fees amounted to $155.94 million (2021: $88.70 million)
Corporate service fees totalled $28.23 million (2021: $18.22 million)
Other expenses amounted to $75.76 million, (2021: $43.09 million)
Performance fees amounted to $12.49 million (2021: nil).
For the third quarter, SRF spent $94.67 million in operating expenses a 132% increase from the $40.83 million reported in the third quarter.
For the nine months ended May 31, 2022, the Company reported an operating loss worth $197.62 million compared to an operating profit of $975.89 million the previous year, while for the third quarter the operating loss amounted to $74.17 million, relative to a loss of $29.32 million reported the previous quarter.
The Company reported share of gain from a joint venture for the nine months ended at May 31, 2022 worth $161,000 from the share of loss of the joint venture $2.76 million in the prior year. Consequently, net loss for the period amounted to $197.46 million relative to net profit of $2.28 billion at the end of May 2021. For the quarter, net loss closed at $72.73 million compared to net profit of $1.28 billion documented twelve months prior.
Loss per share (LPS) for the period amounted to $1.05 (2021 EPS: $12.16). LPS for the quarter amounted to $0.39 versus EPS of $6.84 booked in the prior comparable period. The trailing twelve months loss per share amounted to $3.55. The number of shares used in our calculations is 187,392,532. SRFJMD stock price closed the trading period at a price of J$12.55 and SRFUSD closed at $0.13 on July 18, 2022.
Balance sheet at a glance:
As at May 31, 2022, total assets amounted to $11.68 billion, 58% up from the $7.39 billion booked in 2021. This was mainly attributed to the significant increase in the value of ‘Investment Property’ which rose from $5.74 billion in 2021 to $7.29 billion at the end of May 2022, representing a 27% increase.
Shareholders’ equity closed at $6.70 billion relative to shareholders’ equity of $5.18 billion recorded in the prior year’s corresponding period. This resulted in a book value per share $35.75 (2021: $27.63).
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