VMIL reports 32% decline in six months net profit

Date: August 15, 2018 

Victoria Mutual Investments (VMIL) for the six months ended June 30, 2018 reported total interest income of $353.66 million, a decline of 8% relative to the $385.41 million recorded for the corresponding period in 2017.

Interest expense for the period amounted to $234 million, a 2% decline relative to the $239.84 million recorded in 2017.

As such, Net interest income closed the period at $119.67 million, an 18% or $25.90 million decline relative to the $145.57 million recorded for the corresponding period in 2017. Net interest income for the quarter totaled $53.47 million, a 29% decline on the $75.69 million booked in 2017’s corresponding quarter.

VMIL recorded gains from investment activities for the period of $79.56 million, a 20% or $13.03 million increase relative to the gain of $66.53 recorded in 2017.

Net fees and commissions closed the period at $370.14 million, a gross increase of 58% compared with the $234.37 million recorded for the comparable period in 2017.

Other income for the period reflected a total of $6.84 million, a significant increase of $4.63 million or 209% surge compared to $2.21 million recorded for last year.

Staff cost and other operating expenses increased 12% and 43% respectively, to close the period at $156.64 million (2017: $139.72 million) and $173.48 million (2017: $120.95 million) respectively. The Company noted, this was “due mainly to our investment in human resources as well as systems enhancements to meet the changing needs of our business. However, our efficiency ratio improved from 58.10% for the corresponding prior year period to 57.29% for this half-year period.”

Profit before taxation amounted to $131.58 million for the period, a 30% or $56.43 decline relative to $188.01 million recorded for the prior period. Taxation amounted to $35.33 million (2017: $45.90 million).

Consequently, net profit for the six months ended amounted to $96.26 million, a 32% or $45.85 million decline relative to the $142.11 million booked for the same period in 2017. Net profit for the quarter totaled $17.56 million, a 77% contraction on the $75.28 million recorded for 2017’s prior quarter. The Company noted, “The reduced profit when compared to 2017 reflects the Group’s provision for expected credit losses in the second quarter that was primarily comprised of $109.56 million in respect of Government of Barbados global bonds (GoB bonds) held by our wholly-owned subsidiary, Victoria Mutual Wealth Management Limited, in their investments portfolio. If it had not been for the credit loss provision on the GoB bonds, net profit for the quarter and six months ended June 30, 2018 would have been $90.6 million and $169.3 million, respectively, being 20.35% and 19.13% over the respective comparative 2017 periods.”

Earnings per share for the period totalled $0.06 (2017: $0.09), while earnings per share for the quarter amounted to $0.01 (2017: $0.05). The twelve month trailing earnings per share is $0.20.The number of shares used in our calculations 1,500,025,000 units. Notably, VMILs stock price closed the trading period on August 14, 2018 at a price of $3.92.

Balance Sheet:

As at June 15, 2018, The Company’s asset base totaled $18.90 billion, up from $16.24 billion at June 30, 2018. The main contributor to the increase in total assets was ‘Investment Securities’ which amounted to $14.01 billion relative to $12.63 million for the 2017 period. VMIL noted, “Which was in line with the Group’s strategy for managing investment portfolios”.

Total Stockholders’ Equity as at June 30, 2018 was $2.44 billion (2017: $1.89 billion); resulting in a book value per share of $1.66 (2017: $1.26).

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