Group posts healthy profits more than half a billion dollars

The Mayberry Group has managed to reverse the losses made last year to recorded a significant improvement in net profit attributable to shareholders for the nine months ended September 30, 2021.

The Jamaican based and listed financial outfit made shareholders profit  of $513.2 million for the period under review when compared to the loss of $663.8 million for the corresponding period in 2020.

This was attributable mainly to growth in revenues from net interest income, which grew 216% year-over-year, driven by the corporate bond portfolio.

This was in addition to unrealized fair value gains on the revaluation of investments, which grew by 153% or $1.6 billion on account of price appreciations on strategic equities held in its subsidiary equities company, Mayberry Jamaican Equities (MJE) investment portfolio.

In their latest quarterly report to shareholders, the management advised shareholders that, “this performance was tempered by reduced trading gains which were lower by 64% when compared to the prior year period. This resulted in an earnings per share (EPS) of $0.43 for the nine months to September 30, 2021 compared to a loss per share (LPS) of $0.55 for the prior year.”

The Group recorded a significant turnaround in total comprehensive income attributable to shareholders of $1.2 billion for the nine-month period compared to a total comprehensive loss of $5 billion for the corresponding period in 2020.

 “The gradual return of investors’ confidence to the local financial market drove the increase in fair value reserves following price appreciations for strategic stocks held in the equity investment portfolios in the Group,” the management advised.

Break down of revenue growth across business lines.

The revenue lines that experienced growth during the quarter were as follows:

·      Net interest income of $313.3 million increased by $246.4 million, Q3 2021 over Q3 2020. This growth was driven mainly from arrears on a corporate bond and increased revenue on repurchase agreements.

·      Fees and commission income of $103.4 million for July to September 2021 was higher by 85% over the corresponding period in 2020, attributable to increased transactions for equities, higher take up on margin loans, in addition to increased commission selling fees and managed products fees.

·      Dividend income of $92.2 million increased by $47.1 million for Q3 2021 over Q3 2020, reflecting overall higher receipts in 2021.

·      Our cambio operations continued a good performance for the period to date taking advantage of opportunities locally and internationally. With the execution of effective spread management, we generated a 67% or $41.6 million increase in net foreign exchange gains over Q3 2020.

Conversely, the following revenues declined:

·      Overall net trading gains were lower by $246.2 million, mainly attributed to trading on the bond portfolio.

·      Unrealized gains on investment revaluation of $49.1 million for Q3 2021 decreased by $90.9 million when compared to prior year. This mainly resulted from the revaluation of equities classified as fair value through Profit or Loss (FVPL), on the subsidiary Company, Mayberry Jamaican Equities Limited (MJE).

·      Operating expenses for Q3 2021 decreased by 6%, moving from $414.8 million in Q3 2020 to $391.6 million in the current period under review. The decrease was driven by lower expenditure in core support areas of the business, namely computer expenses, legal and professional fees, and consulting fees. For the nine months to September 2021, the Group recorded total operating expenses of $1.2 billion compared to $1.1 billion for the corresponding period in the prior year. The marginally higher expenditures reflect cost management initiatives in business support areas.

Subsidiary Highlights

Mayberry Jamaican Equities (MJE) made net additions to investments during the quarter reflecting the continued favorable pricing of some stocks relative to the Investment Manager’s growth projections for earnings and dividend yield. The Company continues to strategically invest in key Jamaican stocks to enhance its portfolio and to deliver sustainable growth in the long-term.

In the wake of the gradual return of investors’ confidence to the local financial markets and the continued favourable performance of strategic stocks in MJE’s portfolio, the company reported a net profit of $78.1 million for quarter ending September 2021 compared to $87 million in the prior year.

This performance mainly resulted from increased realized foreign exchange gains of $31.2 million and dividend income of approximately $48.7 million when compared to the same period in 2020

In addition, total operating expenses were lower by $2.2 million, resulting mainly from reduced computer expenses. For the nine months ended September 30, 2021 MJE recorded improved profitability of $572 million compared to a net loss of $1.1 billion for the corresponding nine-month period in 2020.