Durrant Pate/Contributor

Sygnus Real Estate Finance (SRF) has seen a turnaround in fortunes, as its investment in a new joint venture company, Delphin Holdings Limited (DHL), has returned the real estate development and investment company to profitability for the third quarter of 2025.

SRF has acquired 86 per cent of the ordinary shares in DHL, which owns 4.9  acres of land in the parish of Trelawny. Primarily as a result of the DHL acquisition, SRF generated a net profit of J$151.74 million for the third quarter ended May 2025, reversing the net loss of J$136.02 million chalked during the same period last year.

The net profit of J$151.74 million is an improvement on the J$38.23 million reported in the second quarter ended February 28, 2025. SRF generated an average annual return on equity of 19.1 per cent over the past five years of its first investment life cycle, which ended August 2024.

This positive performance also resulted in a lower loss for the combined three quarters ended May 2025 versus the similar period last year. Book value per share increased 7.3 per cent to J$24.14 compared to J$22.49 last year, given a J$659.83 million or 25.1 per cent increase in retained earnings to J$3.29 billion as at the end of the period. 

During the period, SRF continued to advance the ongoing execution of interior build-out works for some tenants of the nine-storey One Belmont commercial office tower in New Kingston and the monetisation of its partial exit from the One Belmont investment. In addition, SRF is advancing the value creation process for the Mammee Bay hospitality asset in St. Ann and the Lakespen industrial asset in St. Catherine. 

Core revenues in positive territory

Total investment income or core revenues have gone into positive territory for the quarter under review closing at J$380.54 million compared to negative J$82.43 million for the three months ended May 31, 2024. For the combined three quarters, core revenues amounted to J$407.13 million compared to negative J$137.74 million for May 31, 2024. 

This was primarily due to increased lease and other income, a gain on disposal of financial instruments of J$33.73 million, a gain on acquisition of shares of J$95.48 million and a share of gain on joint ventures of J$583.11 million. The share of gain on joint ventures primarily resulted from SRF’s strategic acquisition of 86 per cent of the ordinary shares in DHL.

The share of gain on joint ventures amounted to J$543.85 million for the quarter compared to a loss of J$6.38 million last year, while the share of gain on joint ventures for the combined three quarters was J$583.11 million compared to a loss of J$7.18 million last year. This was mainly driven by Sygnus Real Estate Finance’s acquisition of DHL, its increased ownership stake from 70 per cent to 86 per cent in the Audere Holdings Limited joint venture and SRF’s 71 per cent ownership in another newly formed joint venture company referred to as 5658 LMR Limited, whose underlying assets are two resort villa properties located in Ocho Rios, St. Ann.

FX losses 

Net foreign exchange during Q3 amounted to J$58.11million compared to a gain of J$20.03 million last year. SRF reported net foreign exchange losses of J$42.50 million for the combined three quarters compared to a loss of J$31.92 million last year. 

SRF reported total operating expenses of J$115.25 million, up 47.3 per cent or J$37.02 million last year. Total operating expenses for the nine-month period closed on J$302.05 million, up 20.3 per cent or J$51.03 million, relative to J$251.02 million last year. 

The increase for Q3 2025 relative to last year was primarily due to increased professional fees in relation to the Mammee Bay asset, and assets undergoing workout. This also translated to the increase noted for the nine-month period, along with increased management fees relative to the corresponding period in FY 2024.