Surge in USA portfolio at it went up 41%, well above gains in main USA market indices

Durrant Pate/Contributor

Investment company, QWI Investments has reversed the losses posted in 2023 with big gains for the fiscal year ended September 2024.

Pre-tax profit closed the year on $170.5 million compared with a loss of $58 million in 2023. After-tax amounted to $130.8 million, representing a return on equity of 7.75 per cent. 

The stand-out performer was the USA portfolio, which appreciated by 41% in the year and 42% including dividend income. This performance is well above the gains in the main USA market indices.

The USA market is the one in which the bulk of QWI’s overseas investments are invested. The Jamaican portfolio, climbed $166.8 million from an unrealized loss of $94 million in 2023, after generating $72 million in unrealized gains this year. The overseas portfolios showed increased gains of $41 million. These two factors accounted for $207 million.

Financial highlights for 2024

QWI ended the fiscal year with equity capital of $1.819 billion, up from $1.685 billion in September 2023. Total Investments amounted to $2.2 billion with 64% represented by Jamaican listed stocks and the majority of the balance invested in the USA market. 

At September 2024, the company held US$5.1 million in equities listed in the USA and Trinidad and Tobago. The portfolio includes positions in several leading information technology, health insurance and companies involved in housing and construction. Non-current margin loan borrowings at the end of September 2024 were $149 million while current margin loans totalled $88 million.

4^th quarter results

QWl’s Jamaican investments, which represent 64% per cent of the company’s portfolio, produced unrealized gains of $30.8 million in the 2024 September quarter versus a loss of $51.8 million in the comparative 2023 quarter. 

Realized losses amounted to $17.8 million in the quarter compared with a fourth-quarter loss in 2023 of $11.8 million. The loss incurred in 2024 arose almost entirely from the opportunity to sell a single stock, which had performed poorly but had been difficult to sell previously.  The overseas portfolio produced $18.2 million of unrealized gains in contrast to an unrealized loss of $4.9 million a year ago. Realized gains totalled $5.9 million, up from $0.4 million a year ago.

The Net Asset Value (NAV) of the company’s shares increased 0.8% from $1.32 in June 2024 quarter to $1.33 at the end of September 2024. Admin costs rose to $24 million (Q3 2023 – $14.7 million) while interest expense declined from $8.6 million in the year-ago quarter to $8.2 million. 

The increased administrative costs arose primarily from higher accruals for management expenses during the quarter due to the increase in portfolio size. The directors approved an interim dividend of 2.5 cents per share, payable on December 12, 2024 to shareholders on record as of November 14, 2024. 

They also took note that the stock price traded up to 89 cents at the time of submitting its audited annual report last week for a gain of a solid 39% from a year ago.