Sygnus reports 34% increase in six months net profit

Date: February 14, 2019

Sygnus Credit Investments Limited reported Interest Income of US$ 1.46 million 196% increase on the US$493,068 recorded in 2017. For the quarter, Interest Income rose 167% to US$856,155 (2017: US$320,736). Management noted, “The performance was driven by higher interest income from a larger portfolio of private credit investments.”

The Company also reported Fair Value Gains of US$33,904 (2017: nil) and Participation fees of US$30,944 (2017: US$7,500). The company booked Net Foreign Exchange Gains of US$295,243 in 2017 relative to nil in 2018. Management noted the performance of Fair Value Gains, “were driven by investments in two Portfolio Companies with profit sharing upside, in addition to regular investment  income that is earned.” As such, Sygnus reported six months revenue of US1.53 million compared to US$795,811. For the quarter, Sygnus booked revenue of US$1.57 million versus US$744,110 for the quarter December 31, 2017.

Total Expenses for the period amounted to US$578,979, a 562% surge relative to US$87,418 recorded for the corresponding period in 2017. Total expenses for the quarter amounted to US$268,163 relative to US$45,859 for the same quarter of 2017. Of expenses:

Net foreign exchange loss totalled US$60,509, (2017: Nil), while Management fees amounted to US$349,307 (2017: nil). The Company noted, “there continued to be substantial foreign exchange volatility between the Jamaican and US currencies, with the local exchange rate continues to experience its most volatile two-way movement in more than two decades, as the central bank transitions to an inflation targeting regime.”

Other expenses for the period amounted to US$33,589 (2017: Nil). Audit Fees declined 60% year over year from US$20,000 in 2017 to US$8,037 for the first six months of 2018.

Registration fees decline 75% to US$2,745, down from US$11,197 in 2017. Directors Fees and Related Expenses rose 41% to close at $US15,246 (2017: US$10,803). Irrecoverable Withholding Tax and Professional Fees amounted to US$35,264 (2017: US$11,504) and US$8,311 (2017: US$21,360) respectively.

Profit for the period of  US$947,753 was booked for the period, relative to US$708,393 in 2017, a 34% increase year over year. For the quarter the Company booked US$1.31 million compared to US$698,251 for the same quarter of 2017.

As a result, Earnings per share (EPS) for the period amounted to US$0.005 (JMD: $0.657) relative to an earnings per share of US$0.004 (JMD: 0.48) for 2017. EPS for the quarter amounted to US$0.007 (2017: US$0.004). the twelve months trailing eps amounted to US$0.009. The number of shares used in our calculations amounted to 184,311,300 units. Notably, SCIJA and SCIJMD closed the trading period on February 13, 2019 at a price of $11.42 and 10.99 respectively. Both SCIUS and SCIUSD closed the trading period on February 13, 2019 at US$0.11.

Balance Sheet Highlights

As at December 30, 2018, Sygnus’ total assets amounted to US$38.02 million, a 128% increase on 2017’s assets base of US$16.7 million. This was due to an increase in ‘investments’ to US$26.21 million (2017: US$11.56 million) and ‘Finance lease receivables which was declared at US$1.74 million (2017: Nil). Cash and Cash Equivalents jumped from US$226,809 as at December 31, 2017 to US$1.81 million as at December 31, 2018.

Total Stockholders’ equity as at December 31, 2018, closed at $37.10 million, a 123% increase from $16.67 million for the corresponding period last year. This resulted in a book value per share of US$0.20 compared to the value of $0.09 as December 30, 2017.



Analyst Certification -This research report is for information purposes only and should not be construed as a recommendation. 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 affect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.