Income from core operations for the quarter improved significantly

Real estate development company, PanJam has seen a change in fortunes in the March quarter, where it earned $1-billion extra in net profits.

Net profit attributable to shareholders of $1.01 billion was recorded for the three months ended March 31, 2021, representing a substantial increase over the $10 million recorded in the same period in 2020, which was negatively impacted by the onset of the COVID-19 pandemic. Income from core operations for the quarter improved significantly relative to the first three months of 2020.

Investment gains of $225.0 million reflected a level of improvement in the Jamaican equities market, compared to $1.1 billion of unrealised investment losses in the first quarter of 2020, which were driven by a decline in global markets related to COVID-19 uncertainty. PanJam’s property portfolio continues to deliver strong and consistent performance, remaining relatively flat on a year-over-year basis.

Other income totaled $34.7 million, well below the $363.1 million recorded in 2020, which was comprised principally of a non-recurring gain on the sale of its Bamboo Avenue property in Kingston. In keeping with management’s goal of reducing costs and implementing efficiencies where possible, operating expenses fell by 4.5 per cent relative to the first three months of 2020.

Finance costs rising as a result of higher interest rates

However, finance costs increased from $145.8 million to $224.3 million, as a result of higher effective interest rates and increased borrowing levels. The results of associated companies consist principally of PANJAM’s 30.2 per cent investment in Sagicor Group Jamaica  as well as minority positions in a number of diverse private entities across the adventure tourism, business process outsourcing, hospitality, consumer products, micro-lending and office rental sectors.

Income from associated companies for the March quarter increased by $318.5 million or 54.5 per cent, driven principally by Sagicor’s results, but also positively influenced by strong results its investment in Walkerswood. Total assets at March 31, 2021 amounted to $62.4 billion, compared to $62.6 billion at December 31, 2020 and $56.2 billion at March 31, 2020.

Stockholders’ equity of $47.1 billion was relatively flat to the December 31, 2020 balance of $47.2 billion. This equates to a book value per stock unit of $44.37 (December 31, 2020: $44.47).

Outlook for 2021

Although there was a spike in COVID-19 cases locally in the first quarter of 2021, PANJAM continues to see a measured return to normalcy as a result of the Government of Jamaica’s efforts to contain any additional spread of the virus. The directors have applauded the government and private sector leaders, who are taking the steps necessary to ensure and enable the increase in business activities in a safe manner.

The company is also encouraged by the Ministry of Health and Wellness’s vaccination drive and is heartened by the population’s positive response to the initiative. Successful vaccination of the majority of Jamaicans is the quickest way to economic recovery.