November 11, 2022
Victoria Mutual Investments (VMIL) reported total interest income of $1.04 billion, an increase of 30% relative to the $802.43 million recorded for the corresponding period in 2021. Interest income for the quarter stood at $343.09 million relative to the $270.85 million reported in 2021.
Interest expense for the nine month period amounted to $839.39 million, a 57% increase relative to the $533.66 million recorded in 2021.
As such, net interest income closed the period at $204.08 million, a 24% decline relative to the $268.77 million recorded for the corresponding period in 2021. Net interest income for the quarter totaled $57.63 million, a 26% decrease on the $78.25 million booked in 2021’s corresponding quarter.
VMIL recorded gains from investment activities for the period of $558.38 million, a 22% contraction relative to the gain of $712.17 million recorded in 2021.
Net fees and commissions closed the period at $782.20 million, a 7% increase compared with the $729.99 million recorded for the comparable period in 2021.
Other losses for the period reflected a total of $912,000 compared to other income of $59.63 million recorded for last year.
Consolidated revenues amounted to $1.54 billion (2021: $1.77 billion) for the nine months ended September 30, 2022.
Staff cost and other operating expenses increased 19% and 18% respectively, to close the period at $580.02 million (2021: $486.55 million) and $501.72 million (2021: $426.85 million) respectively.
Notably, VMIL also booked a recovery on ‘Provision for credit losses on financial assets’ of $16.46 million relative to a loss of $21.64 million for 2021.
Total operating expenses for the nine months amounted to $1.07 billion (2021: $891.76 million).
Operating profit amounted to $478.46 million for the nine months, a 46% decline relative to the $878.81 million recorded for the prior corresponding period. Operating profit for the quarter totalled $134.73 million (2021: $509.29 million).
Share of loss in associates amounted to $24.72 million (2021: $28.43 million).
Profit before taxation amounted to $453.74 million for the period, a 47% decline relative to the $850.38 million recorded for the prior period. Taxation amounted to $118.96 million (2021: $238.05 million).
Consequently, net profit for the nine months amounted to $334.78 million, a 45% decrease relative to the $612.33 million booked for the same period in 2021. Net profit for the quarter totaled $84.08 million, an 76% decline on the $347.77 million recorded for 2021’s corresponding quarter.
Total comprehensive loss for the nine months ended September 30, 2022, amounted to $1.04 billion relative to a gain of $183.36 million for the similar period in 2021. For the third quarter of 2022, total comprehensive loss amounted to $227.89 million compared to a gain of $319.83 million reported for the similar quarter in 2021.
Earnings per share for the period totalled $0.22 (2021: $0.41), while earnings per share for the quarter amounted to $0.06 (2021: $0.23). The twelve-month trailing earnings per share is $0.19. The number of shares used in our calculations 1,500,025,000 units. Notably, VMILs stock price closed the trading period on November 11, 2022 at a price of $4.39 with a corresponding P/E of 22.98 times.
VMIL noted, “The third quarter of 2022 was turbulent, as we saw interest rates reaching an 11-year peak, as the central bank sought to put a lid on domestic inflation. As rates across the market soared, the performance of bonds and the fixed income markets deteriorated significantly, in conjunction with the negative impact of higher inflation on the equities market. As a result, our Gains from Investment activities experienced a 23.77% decline over the quarter, while interest expenses grew 48.22% to $285.47 million. These market conditions were the main impetus to the 75.82% decline in net profit for the third quarter.”
The Company also noted that, “VMIL’s investment grade CariBBB- credit rating from Caribbean Credit Rating Services Limited (CariCRIS) was reaffirmed during Q3 2022. The stable outlook was maintained, based on VMIL’s expansion and stronger market position, which have been backed by the VM Group, as well as improved liquidity position, which allowed for effective renegotiation and extension of maturing debt.”
Balance Sheet at a Glance:
As at September 30, 2022, The Company’s asset base totaled $27.57 billion, down from $30.40 billion reported as at September 30, 2021. The main contributor to the decline in total assets was ‘Resale Agreements” which amounted to $1.02 billion relative to $3.82 billion in 2021. Additionally, “Investment Securities” decline by $2.30 billion to end at $18.56 billion (2021: $20.86 billion).
Total Stockholders’ Equity as at September 30, 2022 was $2.96 billion (2021: $4.51 billion); resulting in a book value per share of $1.97 (2021: $3.01).
Disclaimer:
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. 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 effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.