May 17, 2021
Victoria Mutual Investments (VMIL) for the three months ended March 31, 2021 reported total interest income of $256.68 million, an increase of 6% relative to the $241.75 million recorded for the corresponding period in 2020.
Interest expense for the period amounted to $176.53 million, a 9% increase relative to the $161.91 million recorded in 2020. As such, Net interest income closed the period at $80.15 million, a marginal improvement on the $79.85 million recorded for the corresponding period in 2020.
VMIL recorded gains from investment activities for the period of $199.39 million, in contrast to a loss of $6.90 million recorded in 2020.
Net fees and commissions closed the period at $161.41 million, a decrease of 15% compared with the $190.04 million recorded for the comparable period in 2020.
Other income for the three months reflected a total of $41.50 million, an increase of $36.11 million compared to $5.39 million recorded for last year same time. Consequently, total other operating revenue increased $213.78 million to close at $402.30 million (2020: $188.53 million) for the period under revenue.
Net interest income and other operating revenue amounted to $482.45 million for the three months ended March 31, 2021, up 80% from $268.37 million booked for the first three months of 2020.
Staff cost increase 12% to close at $162.36 million versus $144.53 million recorded for the same quarter of 2020, while other operating expenses rose 17% to close the period at $189.82 million (2020: $162.55 million). VMIL recorded impairment losses on financial assets of $22.43 million compared to $40.73 million booked for the first three months ended March 31, 2020. VMIL noted, “the expenses are growth-focused and relate to the development of team members and other support services required to position VMIL for future growth.”
Operating profit for the three months ended March 2021 amounted to $107.85 million versus a loss of $79.44 million for corresponding quarter in 2020. Share of loss in associate for the period under review stood at $8.56 million (relative to a loss of $9.13 million for the same quarter of 2020.
Profit before taxation amounted to $99.28 million for the period, in contrast to a loss of $88.56 million recorded for the first quarter ended March 2020. Tax charge amounted to $9.69 million (2020 tax credit: $51.66 million charged).
Consequently, net profit for the quarter totaled $89.59 million, compared to a loss of $36.90 million booked for the same period in 2020.
Total Comprehensive loss for the period amounted to $270.53 million relative to a loss of $984.55 million reported for the first quarter of 2020.
Earnings per share totalled $0.06 (2020: $0.02 LPS) for the period. The twelve-month trailing earnings per share is $0.37. The number of shares used in our calculations 1,500,025,000 units. Notably, VMILs stock price closed the trading period on May 14, 2021 at a price of $6.66 with a corresponding P/E of 17.84 times.
“The first quarter of 2021 saw an improved investment climate when compared to 2020 with rising bonds and equity prices coupled with an increasing appetite for capital market transactions,” said Rezworth Burchenson, VMIL’s Chief Executive Officer. “Our various initiatives at regional market penetration, sales productivity improvement, digitalisation, investment management performance and timely capital allocation, are yielding varying degrees of success.”
The company highlighted that, “VMIL’s performance revealed encouraging results and comes as the local economy continues to experience significant blows from the COVID-19 pandemic.
Our Bond Trading Unit generated exceptional performance in revenue when compared to 2020. We are keenly monitoring the interest rate outlook for the developed markets to mitigate any challenges to this business line.
Our Asset Management Unit continues to be resilient with growth in fee income and assets under management despite investors’ appetite for fixed income securities. Our Real Estate Portfolio continues to add value for long term investors and is poised to execute transactions in the near term which will provide both geographic and market segment diversification.
Our Treasury Unit provided a modest performance despite a challenging environment of compressing spreads due to a very competitive environment. Our capital allocation strategies will provide further strengthening of this business line during the year.
Our Capital Markets Unit continues its aggressive business development activities with our advisory and arrangement services providing capital raising strategies for corporates.”
Furthermore, VMIL stated that, “On March 10, VMIL partnered with the Jamaica Chamber of Commerce (JCC) for our Annual Post-Budget Review forum. Leaders and experts in business and academia discussed the potential pitfalls and benefits of the annual national budget, making the usually esoteric financial information more accessible and digestible, for a wider cross section of people.”
Balance Sheet:
As at March 31, 2021, The Company’s asset base totaled $27.53 billion, 11% up from $24.74 billion as at March 31, 2020. The main contributor to the increase in total assets was ‘Investment Securities’ which amounted to $19.01 billion (2020: $16.10 billion), reflecting an 18% year over year increase.
Total Stockholders’ Equity as at March 31, 2021 was $4.11 billion (2020: $3.30 billion); resulting in a book value per share of $2.74 (2020: $2.20).
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