Slight decline in total income during half year ended March 31, 2022

Durrant Pate/Contributor

Investment company QWI Investments has seen its profitability slowing down during the half-year period, ended March 31, 2022.

Net profit for the period amounted to J$121.72 million, down from the gain of J$170.72 million booked for the comparable period in 2021. The March quarter booked net profit of J$38.68 million relative to a net profit of J$78.98 million documented in 2021.

Profit before taxation amounted to J$154.04 million versus J$228.61 million booked for the six months ended March 31, 2022.

Tax expenses came out at J$32.32 million, down from J$57.89 million in 2021.

QWI Investments, which is the investment arm of the Jamaican Teas group, reported a decline in total income to J$226.15 million relative to the J$265.33 million booked in the corresponding period last year. This came from gains from investment activities of J$184 million down from J$259.28 million in 2021.

During the March quarter, gain from investment activities was also down amounting to J$70.60 million versus gains of J$126.85 million in 2021. In addition, dividend and interest income amounted to J$18.14 million as at March 2022, down from the 2021 posting of $17.54 million).

18% decline in Jamaican portfolio performance

The management report that, “the Jamaican portfolio produced unrealised gains of $156.8 million versus J$191.6 million a year ago. The 18 per cent decline in investment gains were due to the lower price performance of some leading Jamaican stocks in the portfolio. The performance of the company’s USA investment portfolio resulted in unrealised losses of near J$10 million during the period. In addition to our investment gains which totalled J$184 million, there was an unrealised exchange gain of J$24 million compared to a loss of J$12 million in the year-ago period”.

Unrealised currency gain amounted to J$24.01 million compared to a loss of J$11.49 million.

Administrative expenses for the period amounted to J$56.89 million, up from the J$23.68 million, while interest expenses amounted to J$15.22 million, up from J$13.05 million in 2021.

Earnings per share for the period amounted to J$0.09 for the six months ended March 31, 2022 relative to earnings per share of J$0.13 for the comparable period in 2021. Additionally, QWI closed the trading day yesterday at a price of J$0.92.

The management explains that, “the sharp increases in inflation and interest rates now taking place could impact the prices of investments and securities negatively over the next two years. Indications are that our holdings will continue to perform well over the balance of the fiscal year and we remain cautiously optimistic”.

Good results from some Jamaican companies

The management commented that, “it is worth noting that in Jamaica we are still seeing a number of companies reporting good results and raising additional share capital. So far, investors are responding well to these developments and the current trend appears to be positive. While the Junior Market has led the improvement in the local market and more price gains are expected from that market, there are emerging signs that the JSE (Jamaica Stock Exchange) Main market could rebound sometime during this year”.

QWI’s investment portfolio is reviewed on an ongoing basis with changes, as the Investment Committee believes will be advantageous to QWI. As at March 31, 2022, total assets closed at J$2.41 billion (2021: J$1.97 billion), a 22 per cent increase.

Of this increase, quoted investments (local) grew by 24 per cent closing at J$1.81 billion (2021: J$1.45 billion). In addition, ‘due from brokers and receivables’ had an increase of J$123.26 million to $128.73 million (2021: J$5.47 million).

The overall movement in the asset base was tempered by quoted investments (overseas) which decrease to J$460.43 million (2021: J$509.53 million). The total equity as at March 31, 2022 amounted to J$1.90 billion (2021: J$1.65 billion).

This resulted in a net asset value per share of J$1.39 (2021: J$1.21).