Cess income suffered big decline of 46% while earnings form its E-campus was down 34%

The negative impact of the coronavirus (COVID-19) pandemic on the equities market was evident in the 22 per cent decline in net profits reported for 2020 by the Jamaica Stock Exchange Limited (JSE).

In addition to suffering a decline in profits, the equities regulator also suffered a big drop in cess income, its primary income stream thus causing total revenues to go down by nine per cent year-over-year to $1.71 billion coming from the $1.87 billion reported in 2019.

Cess income fell by 46 per cent to $380.02 million relative to $697.32 million the previous year while fee income grew by 16 per cent to $1.22 billion to close the year, compared to $1.05 billion in 2019. Earnings from the JSE E-campus business showed a decrease of 34 per cent to $31.65 million, relative to $48.31 million in 2019.

Other operating income rose one per cent during the period to total $84.61 million compared to $83.68 million in 2019 but total revenue for the December quarter was down to $451.31 million compared to the $484.85 million reported for the comparable period in December 2019.

Slight growth in expenses

Total expenses for the year increased by 4% moving from $1.09 billion in 2019 to $1.14 billion in 2020.  Of this:

• Staff cost increased six per cent to total $477.32 million for the year (2019: $450.09 million).
• Depreciation and amortization totaled $67.17 million for the year relative to $59.41 million in 2019.
• Professional fees amounted to $75.50 million (2019: $49.98 million) a 51 per cent increase year over year.
• Property expenses climbed 28 per cent to $229.77 million (2019: $179.51 million) for the period.
• Other operating expenses grew by 14 per cent to $72.01 million from $63.28 million the previous year.
• Advertising and promotion was down by 35 per cent from $90.75 million in 2019 to $139.33 million.
• Securities commission fees posted a 44 per cent decrease year over year to close at $57.66 million (2019: $103.04 million).
• Expenses associated with E-Campus amounted to $29.22 million compared to $41.66 million in 2019.

Total expenses for the quarter amounted to $298.07 million coming from $296.88 million posted in 2019. Investment income rose from $22.05 million in 2019 to $43.97 million in 2020.

Drop in profits for 2020

As such profit before tax totaled $618.47 million compared to $803.07 million the prior year’s corresponding period. Tax charges for the year totaled $211.53 million (2019: $283.20 million).

Consequently, JSE reported a net profit for the year of $406.94 million compared to a profit of $519.88 million in the prior year, a 25% decline. Net profit for the quarter amounted to $120.66 million coming from $110.76 million posted in the comparable period in 2019.

Total comprehensive income for the year amounted to $428.76 million relative to $625.39 million in 2019. Earnings per share (EPS) for the year totaled $0.58 compared to $0.74 in 2019.  

EPS for the quarter amounted to $0.17 compared to $0.16 for the fourth quarter of 2019. The JSE stock price closed the trading period yesterday (March 2) at $18.04 at a corresponding P/E of  31.09 times.

As at December 31, 2020, assets totalled $1.87 billion, a four per cent increase when compared with its balance of $1.81 billion a year prior. The increase was due to a 31 per cent increase in ‘Cash and Cash Equivalents’ from $107.11 million to $140.51 million and a 15 per cent increase in ‘Property, Plant & Equipment’ also contributed to the increase amounting to $679.52 million (2019: $591 million).