Several strategic stocks in the portfolio rebounded in Q4

Durrant Pate/Contributor

Mayberry Jamaican Equities (MJE) managed to double its profit in 2022 in spite of the tightening of monetary policies, which resulted in increases in interest rates and a challenging financial landscape both locally and globally.

For the year ended December 31, 2022, MJE reported profits of J$5.1 billion, an increase of J$2.6 billion or 104 per cent over the corresponding period in 2021. The pull back in the local equities market beginning in the third quarter of 2022 adversely impacted MJE’s half year results.

However, several strategic stocks in the portfolio rebounded in the fourth quarter buttressing the full year’s solid performance. During the December 2022 fourth quarter, market conditions reflected continued moderate improvements and the local financial environment remained resilient compared to global counterparts.

Net unrealised gains on investments in associates increased by J$2.7 billion or 105 per cent to J$5.2 billion. This was complemented by dividend income increasing by 41 per cent or J$160 million to J$549 million.

Full year earnings per share (EPS) was J$4.21, up from J$2.06 in 2021. MJE recorded a decline in net profits of J$921 million or 50 per cent to J$911 million in the December quarter compared to the J$1.8 billion in 2021.

More significant uplift in stock prices

This reduction is due primarily to the more significant uplift in the market and stock prices in 2021 arising from the recovery from the COVID-19 pandemic in 2020. Total operating expenses for the December quarter increased by J$49 million to J$235 million when compared to the comparative period in the prior year.

This resulted in EPS declining to of J$0.76, down from J$1.52 in 2021.Total comprehensive closed on J$4.8 billion for the year ended December 31, 2022, representing an increase of 53 per cent or J$1.7 billion.

The management reports that, “this was due to solid overall performances on the managed Jamaican equities portfolio. The company recorded total comprehensive income of J$891 million for the three-month period October to December 2022″.

This compares to a total comprehensive income of J$1.4 billion for the similar quarter in 2021. The decrease noted was primarily attributable to unfavourable price movements on securities in the portfolio for the last quarter, which can be attributable to increases in interest rates in the economy and a number of fixed income instruments coming to the market.

Total revenues almost doubled

Net revenues generated for the year increased by 99 per cent or J$2.8 billion to J$5.5 billion attributed primarily to the significant appreciation in the market value of investments in associates. For the December quarter, net revenues were to J$1.1 billion, down from J$2 billion for the same quarter in 2021.

This performance was primarily attributable to reduced unrealised gains on investments in associates of J$827 million. For the year dividend income grew by J$160 million or 41 per cent to J$549 million when compared to J$389 million for the 2021 comparative period.

Marginal decline in dividend income

Dividend income of J$95.8 million was recorded in the December quarter, representing a marginal decline of 1.3 per cent compared to J$97 million for the October to December 2021 quarter. The largest contributors to the portfolio’s dividend revenues for the quarter were Supreme Ventures Limited, Jamaica Broilers Group Limited and General Accident Insurance Company Jamaica Limited with dividends of approximately J$83 million.

For the year the major contributors to dividend revenues were Supreme Ventures, GraceKennedy, Jamaica Broilers, Lasco Distributors and Lumber Depot. Total operating expenses of J$492 million for the year increased by J$185 million or 61 per cent over the corresponding 2021 period, driven mainly by increased expenses incurred for management and incentive fees following the significant growth in the net asset value under management.