Interest income went down by 18% to J$78.88 million for combined three quarters

Sygnus Real Estate Finance (SRF) has seen its net losses for the nine months ended May 31, 2023 surge by 136 per cent to J$465.11 million.

This is up from the J$197.46 million posted for the corresponding period in 2022. For the third quarter, the loss for the period was J$163.24 million, up from J$72.73 million in 2022.

Taxation for the nine months ended May 31, 2023 amounted to nil. Operating loss for the nine months ended May 31, 2023, amounted to $468.24 million, a 137 per cent increase relative to the loss of $197.62 million reported in 2022.

Consequently, Loss Per Share (LPS) for the nine months amounted to J$1.42 (2022: LPS: J$0.60), while LPS for the May quarter totalled J$0.50 (2022: LPS: J$0.22). Notably, SRFJMD and SRFUSD stock last traded on July 14, 2023, at a price of J$12.25 and J$0.11 respectively, with corresponding P/E ratios of 9.40x and 12.98x.

Change to profitability

However, this negative will change to positive when the real estate development company exists some of its current projects later this year such as the J$3.7 billion nine-story “One Belmont“ development in New Kingston and the Spanish Penwood built-to-suit facility for IMCA Jamaica, which is 99.0 per cent completed. 

Operating loss for the nine months ended May 31, 2023, amounted to J$468.24 million, a 137 per cent increase relative to the loss of J$197.62 million reported in 2022. Operating loss for the third quarter amounted to J$163.24 million (2022: $74.17 million).

Total comprehensive expense for the combined three quarters amounted to J$465.21 million, a 136 per cent surge over the J$197.48 million booked in 2022. Total comprehensive expense for the third quarter was J$163.31 million (2022: J$72.71 million).

Interest income down

Interest income for the year-to-date totalling J$78.88 million compared to $96.10 million in the corresponding period last year, representing an 18 per cent decline year-over-year. Interest income for the third quarter saw a 77 per cent drop closing at J$7.81 million compared to J$33.64 million for the comparable quarter of 2022.

Interest expense amounted to J$234.97 million (2022: J$101.33 million), which is an increase of 132 per cent year over year. Consequently, total interest decreased by 171 per cent to an expense of J$36.50 million compared to income of J$51.37 million for the nine months.

The company booked a total interest expense of J$24.97 million for the third quarter versus an income of J$22.65 million reported for the similar quarter of 2022. Management fees increase by 39% to close at J$217.26 million (2022: J$155.94 million), while Corporate service fees increase by 27 per cent from J$28.23 million in 2022 to J$35.82 million in the period under review. 

As a result, operating expenses for the nine months ended May 31, 2023, amounted to J$332.57 million, a 22 per cent increase relative to the J$272.41 million reported in 2022.

Balance sheet highlights

As at May 31, 2023, total assets amounted to J$14.51 billion (2022: J$11.68 billion). This was mainly attributed to the significant increase in the value of ‘Investment Property’ which rose from J$8.03 billion in 2022 to J$10.83 billion at the end of May 2023, representing a 35 per cent increase.

Shareholder’s equity was J$7.12 billion (2022: J$6.70 billion), representing a book value per share of J$21.82 (2022: J$20.51).