XFUND reports year end net loss attributable to shareholders of $9.99 billion

March 02, 2021

Sagicor Real Estate XFUND Limited, for the year ended December 2020, reported total revenue of $2.35 billion relative to $5.67 billion recorded in 2019, a 58% decrease year over year. For the quarter, total revenue closed at $655.05 million versus $1.84 billion in the prior comparable quarter. Management noted, “Our direct hotel operations segment which comprised DTO and JGM contributed $2.65 billion, 57% below prior year. Travel-related revenue continues to be impacted by the worldwide downturn of the tourism market.” The total revenue was accumulated by the following:

  • Net investment income for the year end reduced to $18.53 million versus $23.72 million in 2019, a 22% reduction year over year.
  • Hotel revenue amounted to $2.43 billion, a 54% decline relative to $5.27 billion reported the prior year.
  • Net capital loss amounted to $93.20 million relative to a gain of $221.57 million, while other income stood at $533,000 (2019: $146.86 million).

Operating expenses fell 36% to $3 billion compared to $4.67 billion in the prior corresponding period. For the quarter, operating expenses amounted to $876.02 million compared to $1.54 billion reported in the same period last year. Of this:

  • Hotel expenses decreased to $2.09 billion, down 45% when compared to $3.80 billion in the prior corresponding year.
  • Depreciation closed at $790.08 million versus $724.43 million recorded in the same period in 2019.
  • Interest expense amounted to $683.19 million (2019: $646.05 million).
  • Expenses from discontinued operations amounted to $321.68 million (2019: $622.19 million).
  • Loss on sales of hotel operations amounted to $382.05 million (2019: nil). XFUND noted that, “effective September 22nd, 2020, the Group sold its interest in JGM to Sagicor Pooled Investment Fund Limited (PIF). The transaction significantly improved X-Fund’s liquidity profile and generated inflows of $1.6 billion that were used to pay out maturing debt. The sale price was based on a current valuation, but amid the COVID-19 pandemic, property values declined significantly over the prior year resulting in a loss on disposal of $0.38 billion.”
  • Other operating expenses totalled $118.42 million (2019: $148.99 million).

The Company reported an operating loss of $1.81 billion compared to the operating profit of $356.82 million same period last year.

Share of loss from associate accounted for using the equity method amounted to $5.47 billion compared to a loss of $98.66 million in 2019. Impairment of investment in associate amounted to $7.93 billion (2019: nil) and Dilution of associate totalled $391.30 million (2019: nil) for the year under review.

Loss before tax of $15.59 billion relative to profit before tax of $258.15 million for the year ended 2019. After incurring tax credit of $201.72 million (2019: tax charge of $335.13 million), net loss closed at $15.39 billion compared to net loss of $76.98 million booked in December 2019. For the quarter, net loss closed at $4.98 billion versus net loss of $119.91 million in the previous comparable quarter.

While, total comprehensive loss closed at $15.11 billion versus an income of $538.16 million booked twelve months earlier.

The Company recorded net loss attributable to shareholders of $9.99 billion relative to net loss attributable to shareholders of $38.31 million recorded in 2019. While for the quarter, net loss attributable to shareholders totalled $3.10 billion (2019: net income of $25.98 million).

As such the loss per share (LPS) for the year end closed at $4.45 relative to an LPS of $0.02 at the end of 2019. For the quarter, LPS closed at $1.38 (2019: LPS of $0.01). The number of shares used in our calculations was 2,243,005,125 units. As at March 01, 2021, the stock traded at $8.55.

The company outlook highlighted, “The outbreak of COVID-19 globally triggered a sharp decline in tourist arrivals and the demand for leisure activities. Business activities across Jewel Grande Montego Bay (JGM) and Playa Hotels & Resorts N.V. (Playa) were halted during the earlier part of the year while DoubleTree by Hilton (DTO) continued operations but at reduced occupancy levels. COVID-19 has negatively impacted earnings for the tourism sector which led to the recording of an impairment charge of $7.93 billion on our investment in associated company, Playa.”

Moreover, XFUND noted, “While the Group has demonstrated resilience in this challenging environment, it also had to adjust its business model to outmaneuver the effects of COVID-19. In early January 2021, Jamziv Mobay Jamaica Portfolio Limited (Jamziv) disposed of its 20,000,000 ordinary shares in Playa for which it received inflows of US$96 million. The strong inflow of liquidity will be redeployed into investment opportunities with a projected positive outcome.”

Balance Sheet Highlights:

The Company, as at December 2020, recorded Total Assets of $32 billion, a 35% decrease when compared to $49.22 billion recorded as at December 2019. This was as a result of ‘Investment Property’ which declined by $2.03 billion in 2019 to nil and ‘Property, Plant and Equipment’ which amounted to $12.56 billion (2019: $14.86 billion).

Total Shareholders’ Equity as at December 31, 2020 closed at $15.17 billion, a 41% decrease from the $25.54 billion reported for the corresponding period last year. This resulted in a book value per share of $10.14 (2019: $17.08).

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