Big 250% increase in net profits for March quarter

Durrant Pate/Contributor

Mayberry Jamaican Equities Limited (MJE) is reporting a phenomenal March 2022 quarter with its equities portfolio reversing the $631-million loss posted during the comparable period in 2021.

This has come about because the local financial market is experiencing improved buoyancy with the tempering of COVID–19 fears and related government restrictions, resulting in corporate companies posting improved financial results in several sectors over recent quarters. As a result, the company has generated continued improvements in the performance of stocks in the portfolio.

This resulted in MJE reporting an increase of J$1.6 billion or a 250 per cent increase in net profits for the quarter ending March 31, 2022, when compared to the loss of J$631 million in the prior year. This performance mainly resulted from increased net gains on investments in associates of J$1.6 billion and dividend income of approximately J$12.6 million when compared to the same period in 2021.

In addition, total operating expenses for the year ended March 31, 2022 increased by J$5 million or 16 per cent to J$35 million when compared to the corresponding period in the prior year. This was mainly attributable to expenses incurred for legal and professional and Jamaica Stock Exchange fees.

Group performance equally impressive

The Mayberry group was equally impressive, chalking out net profit attributable to shareholders of J$692 million for the three months ended March 31, 2022. This represents a 309 per cent increase when compared to the net loss of $331 million for the corresponding quarter in 2021.

This performance was attributable mainly to growth in unrealized gains on investments in associates which increased by J$1.6 billion or 214 per cent and unrealised fair value gains on the revaluation of investments, which was higher by J$167 million or 179 per cent. Total operating expenses for the period under review increased by J$131.5 million or 41 per cent to J$454.1 million when compared to 2021.

Group profits before tax increased by J$1.6 billion or 289 per cent, moving to J$1.1 billion during the quarter under review. Other major highlights of the group’s performance include:

• Earnings per share (EPS) increased by J$0.85 or 309 per cent to J$0.58 for Q1 2022 versus a loss per share (LPS) of J$0.28 for Q1 2021.
• Total assets reported for the quarter ended March 31, 2022, grew to J$45.7 billion compared to J$35.7 billion for the comparative period for 2021. This represents a J$10 billion or 28 per cent increase in asset base.
• Net book value per share increased to J$14.32, a J$2.92 or 26 per cent increase over the corresponding period in 2021. This was partially attributable to price appreciations which positively impacted the value of investment securities, investment properties and investment in associates.
• The group continues to report a turnaround in total comprehensive income attributable to shareholders. This totaled J$1.5 billion for the three-month period to March 31, 2022, compared to a total comprehensive loss of J$67.9 million for the corresponding period in 2021.

Net interest income jumped to J$75.5 million, an increase of J$12 million. This growth was driven mainly by increased revenue on repurchase agreements and a greater take up of margin loans.

Decline in FX gain

Net foreign exchange gains amounted to J$47.6 million, which is $$23.2 million lower than 2021. The challenges of demand and supply in the foreign exchange market have impacted the cambio operations unfavourably.

Other income trended down by J$33.2 million compared to the corresponding 2021 period while other operating expenses for the March first quarter of 2022 increased by J$131 million, moving from J$322.6 million in Q1 2021 to J$454 million in the current period under review. The increase was driven by higher expenditure in employee compensation costs up 31 per cent and other support areas of the business, namely computer expenses, legal and professional fees, sales and marketing and consulting fees.

The group is financially strong with its capital adequacy well above regulatory benchmark. Mayberry CEO, Gary Peart reports that, “our capital base continues to be robust and compliant with our regulatory benchmarks. Our Q1 2022 capital to risk-weighted asset ratio of 22.5 per cent improved from 21 per cent for Q1 2021 and complied with the established minimum of 10% set by the Financial Services Commission (FSC)”.

In addition, the company’s tier one capital is 98 per cent of the overall capital of the company and exceeds the regulatory minimum of 50 per cent established by the FSC.