Corporate real estate company, Stanley Motta is concerned about the steep rise in its administrative expenses, which shot up by just under 50% for the nine month period ended September 30, 2020
Administrative expenses for the year to date period went up from $109.9 million for the first nine months of the 2019 financial year to $163.2 million for the period under review, representing a 48.8% increase. Similarly, there was 14.8% increase for the quarter ended September 30, 2020 when compared to that of September 30, 2019, moving from J$43.5 million to $49.9 million.
The jump in admin expenses was due mainly to increases caused by the significant foreign exchange loss of $48.74 million arising from the revaluation of the company’s Development Bank of Jamaica (DBJ) loan, Special Economic Zone fees as well as repairs and maintenance.
The company also spent heavily on additional health and safety requirements in response to the deadly COVID 19 pandemic, beefing up sanitisation and deep cleansing of its buildings and work stations.
Revenues up 10.1%
While Stanley Motta paid heavily in admin expenses, its revenues performed creditably increasing by 10.1% for the nine-month period ended September 2020 to $343.9 million. Revenues for the comparable period in 2019 were $312.4 million.
Revenues for the September quarter came out atJ$117.8 million, up 10.9% increase over $106.2 million recorded for the same period of the prior year. In their latest quarterly report to shareholders, the company directors say, “these increases are mainly attributable to the devaluation of the Jamaican dollar which moved from an average of J$136.69:1US$ as at 30th September 2019 to J$143.95:1US$ at 30th September 2020.”
Net operating income declined year over year, moving from $203.2 million for September 2019 to $186.1 million for the period under review, representing an 8.4% decrease. This decline in the net operating income is due to the year-to-date impact of the foreign exchange.
The directors’ report that without this loss, Stanley Motta would have realised net operating income of approximately $234.8 million for the nine-month period ended September 30, 2020. Funds from operations for the nine-month period amounted to $155.1 million, down from the $167.5 million generated for same period in 2019.
This performance reflected a 7.4% decrease, as a result of the year to year jump in admin expenses.
Slightly better profit margins
The company’s net profit margin for the September 46.8% slightly better than the year to date performance of 43%. This positive out-turn in Stanley Motta, the directors state demonstrates the company’s commitment to maintaining strong operational efficiency, while continuing the collection of rent in a timely manner.
Earnings per share, which is calculated as profit after tax divided by weighted average number of shares amounted to 20 cents for the nine-month period ending September 2020 compared to 22 cents over the corresponding period of the previous year.
The directors cautioned shareholders to expect little fluctuations in the company financial results through to the end of the financial year, based around earning rent in US$, continuing with close to 100% occupancy and maintaining the status quo until year-end.