XFUND reports 11% decrease in six months net profit attributable to stockholders

Date: August 09, 2019

Total Revenue for the six months declined 46% to $3.41 billion (2018: $6.34 billion).  Management noted, “This is as a result of the change in the business model, with the sale of the hotels last year where the discontinued operations contributed revenues of $2.7 million and the gain on the sale of the hotels. The net profits from our direct hotel operations segment reflects this reduction, as it now comprises of DoubleTree and part of JGM.” Of total revenue:

Interest income declined 12% to $11.89 million (2018: $13.58 million)

Net capital gains on financial assets and liabilities declined 71% to $68.94 million (2018: $235.25 million)

Hotel revenue from continued operations increased by 10% to close at $3.33 billion relative to $3.02 billion.

Notably, the also booked no income from hotel revenue from discontinued operations and gain on sale of hotels respectively. The company stated that, “Effective June 1, 2018 the Group sold the Hilton Rose Hall Resort and Spa (Hilton Rose Hall), three (3) of the Jewel hotels as well as lands that were owned by the Sigma Real Estate Portfolio (Sigma Portfolio) and a part of the Jewel Grande to Playa Hotels and Resort N.V. (Playa).”

Operating Expenses for the period decreased 40% to $3.15 billion (2018: $5.23 billion). Of this, interest expense declined 50% to $352.64 million (2018: $702.90 million), while no expenses from discontinued operations were booked for the period relative to an expense of $2.04 billion the prior year. Hotel expenses however increased by 11% to $2.38 billion (2018: $2.15 billion), while depreciation increased 16% to $353.71 million (2018: $305.55 million). Other operating expenses also increased 62% to $61.64 million (2018: $38.07 million). Operating expenses for the quarter amounted to $1.61 billion compared to $2.46 billion reported for the same quarter in 2018.

Share of profit from associate accounted for using the  equity method for the period amounted to $878.56 million relative to nil the prior year. The Company noted, “Playa has shown strong growth in revenues and net income year over year, however the earnings performance is seasonal, therefore the first half of the year is normally stronger than the second half of the year.”

The company’s Profit before Tax climbed 3% to $1.14 billion (2018: $1.11 billion) for the six months. After incurring tax charges of $109.72 million (2018: $336.95 million), Net Profit increased by 34% to $1.03 billion, from $770.17 million for the comparable period in 2018. However, for the second quarter, Net Profit decreased by 99% to close at $2.76 million (2018: $277.53 million).

Net Profit attributable to shareholders declined 11% to $688.87, from $770.17 million for the comparable period in 2018. However, for the second quarter, net loss attributable to shareholders decreased by 102% to close at $5.70 million (2018’s profit: $277.54 million).

The earnings per share (EPS) for the six months closed at $0.31 (2018: $0.34), While, the loss per share for the quarter amounted at $0.003 (2018’ EPS: $0.12). The trailing twelve-month EPS is $0.033.  The number of shares used in our calculations was 2,243,005,125. As at August 8, 2019, the stock traded at $11.23

Balance Sheet Highlights:

The company, as at June 30, 2019, recorded total assets of $51.07 billion, an increase of 32% when compared to $38.75 billion recorded in the prior year. This increase was due to a 1100% increase in ‘Investment in Associate’ to 29.48 billion ($2018: $2.46 billion).

Total Stockholders’ equity as at June 30, 2019 closed at $26.49 billion, a 10% increase from the $24.10 billion for the corresponding period last year. This resulted in a book value of $11.81 (2017: $10.75).

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