July 16, 2024

Sygnus Real Estate Finance Limited (SRFJMD)

Unaudited financials for the nine months ended May 31, 2024:

Sygnus Real Estate Finance Limited (SRFJMD) reported a 32% decrease in interest income totaling $134.02 million for the nine months ended May 31, 2024, compared to $198.47 million in the corresponding period last year. Interest income for the third quarter decreased 18% to close at $45.90 million compared to $56.27 million for the comparable quarter of 2023.

Interest expense amounted to $277.09 million (2023: $234.97 million), an increase of 18% year over year. Consequently, net interest income decreased by 292% to $143.07 million compared to $36.50 million for the nine months ended May 31, 2023. The company booked a net interest loss of $9.42 million for the third quarter versus $31.30 million reported for the similar quarter of 2023.

Management fees decreased by 56% to close at $96.02 million (2023: $217.26 million), while corporate service fees decreased by 8% from $35.82 million in 2023 to $32.97 million in the period under review. As a result, operating expenses for the nine months ended May 31, 2024, amounted to $251.02 million, a 25% decrease relative to $332.57 million reported in 2023.

Operating loss for the nine months ended May 31, 2024, amounted to $433.69 million, a 7% decrease relative to $468.24 million reported in 2023. Operating loss for the third quarter amounted to $114.37 million (2023: $163.24 million). Share of loss of joint venture totaled $7.18 million, a 330% decrease from the corresponding period last year. (2023: gain of $3.13 million).

Profit before Taxation for the nine months ended May 31, 2024, amounted to $440.87 million, a 5% decrease relative to $465.11 million reported in 2023. Profit before Taxation for the third quarter amounted to $120.74 million (2023: $163.24 million).

Taxation charge for the nine months ended May 31, 2024, at $15.28 million (2023: nil). Loss for the period for the nine months amounted to $456.17 million, a 2% increase from the $465.11 million loss reported in 2023. For the third quarter, the loss for the period was $136.02 million (2023: loss of $163.24 million).
Consequently, Loss Per Share for the nine months amounted to $1.40 (2023: LPS: $1.42), while Loss Per Share for the quarter totaled $0.42 (2023: LPS: $0.50). The twelve-month trailing EPS was $1.18, and the number of shares used in these calculations was 326,526,232 units.

Notably, SRFJMD’s stock price closed on July 16, 2024, trading for $12.79, with a corresponding P/E ratio of 10.81x.

Balance Sheet Highlights

The company’s assets totaled $14.64 billion (2023: $14.51 billion), showing a positive growth trajectory. The rise in the company’s asset base is attributed to a significant increase in ‘Interest in the joint venture,’ ending the nine months at $1.53 billion (2023: $1.20 billion), representing a year-over-year increase of 27%, ‘Investments’ ending the period at $2.26 billion (2023: $2.12 billion) and ‘other assets’ closing at $222.58 million (2023: $140.96 million), representing a year over year increase of 58%.

Shareholder’s equity was $7.34 billion (2023: $7.12 billion), representing a book value per share of $22.49 (2023: $21.82).

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