Listed investment company, QWI Investment has doubled its pre-tax profits during its third quarter ending June 2021 reaching $214.3 million versus the $116 million recorded in June 2020.

QWI Investments continues the recovery in Net Asset Values (NAV), which started in the second half of the 2020 calendar year resulting in a further profit in the quarter. For the nine months to June 2021 QWI recorded a profit before tax of $442.6 million compared with a loss of $539 million during the comparable period in 2020.

The results for the year to date have reversed the deficit in the retained earnings of $145.7 million incurred to the end of the financial year to September 2020. Market conditions during the quarter and the fiscal year to date have been favourable and resulted in realised gains on the sale of investments in addition to unrealised gains in the rest of the portfolio.

Big gains in Jamaican stocks

QWI’s Jamaican investments, which represent 73 per cent of the company’s portfolio, produced $144 million of unrealized gains and $11 million of realized gains in the quarter. The NAV of the company’s shares increased 9.9 per cent from $1.21 in March 2021 to $1.33 at the end of June 2021.

This performance betters the 6.9 per cent increase in the All Jamaica Composite Index (AJI) during the quarter. QWI Investments also took advantage of the favourable conditions in the USA and achieved $10.3 million of gains as well as unrealized gains of $51.3 million.

The company’s USA investment portfolio produced a total return of 9.8 per cent, which exceeded the movements in the S&P 500 and the MSCI World Index, QWI’s main benchmark. For the quarter under review, QWI Investments saw unrealised exchange gains totalled $11 million versus $24 million a year ago.

Administration costs increased to almost $13 million (2020-$10 million). This quarter, QWI Investment’s tax expense mainly comprised provisions for deferred tax and amounted to $50.6 million versus less than $1 million a year ago.

Results year-to-date

The NAV of the company’s shares increased by 23 per cent from $1.08 at the end of September 2020 to $1.33 at the end of June 2021. This performance compares favourably with the 11 per cent increase in the AJI and the 20.1 per cent increase in the S&P 500.

QWI’s Jamaican portfolio produced $336 million of unrealized gains in the year to date. Gains of $66 million were realised in the USA. The total investment gain for the year to date was $476 million, which represents almost a $1 billion turnaround from the $521 million of net losses in the year ago period.

The company’s USA investment portfolio produced a total return in US$ of 31 per cent, which represented a significant outperformance of the 20 per cent growth in the S&P 500 and the 28 per cent growth in the MSCI World Index. Unrealized exchange losses totalled less than $1 million versus an $8 million gain a year ago and administration costs were $37 million versus $32 million in 2020.

QWI Investment’s tax expense comprised, in the main, provisions for deferred tax totalling $108.2 million versus a tax credit of $78.6 million a year ago. The company ended the quarter with equity capital of $1.8 billion, up from $1.47 billion at the end of September 2020, resulting from the profit reported during the quarter.

At the end of the quarter, QWI Investments held in excess of US$3 million in equities listed in the USA and Trinidad and Tobago. The portfolio includes positions in several leading information technology and life science companies, retailers, aerospace and service companies.