However strong Q4 performance reverses loss for 2021 comparable period

Durrant Pate/Contributor

Sygnus Real Estate Finance (SRF) exhibited a strong fourth quarter performance but year-end net profit dropped 45 per cent to J$692.96 million.

This is coming from a net profit of $1.81 billion at the end of August 2021. For the fourth quarter ended August 2022, net profit closed at J$890.42 million compared to net loss of J$467.87 million documented 12 months prior.

This stellar fourth quarter performance is due mainly to SRF’S share of gain from a joint venture worth J$546.29 million compared to a gain of J$29.96 million in the prior year. Taxation for the period amounted to J$151. 56 million (2021: nil).

Earnings per share (EPS) for the period amounted to J$3.70 (2021 EPS: J$9.67). EPS for the quarter amounted to J$4.75 versus loss per share of J$2.50 booked in 2021.

Growth in interest income

SRF ended the 2022 financial year in August with interest income of $118.51 million, representing a 21.6 per cent increase when compared to the J$97.48 million reported in 2021. Interest expense for the period amounted to J$148.10 million, a 67 per cent increase relative to the J$88.65 million reported a year earlier.

Interest expense for the fourth quarter amounted to J$46.76 million a 32 per cent increase compared to the J$35.52 million booked 12 months earlier. Net interest income for 2022 surged to J$69.53 million, an increase of 688 per cent compared to the J$8.83 million reported in the previous period.

For the quarter, SRF generated J$18.17 million of net interest income up from the J$8.20-million loss reported in the corresponding quarter a year prior. The management is reporting that, “based on the nature of its business model, SRF’s earnings during interim reporting quarters may experience ‘lumpiness’ in total investment income and net profits, which is typically “smoothed out” at the end of each financial year.”

Fair value loss from financial instruments closed at J$177.82 million relative to J$52.68 million gain reported a year earlier. Foreign exchange gains for the year amounted to J$38.74 million compared to the foreign exchange loss of 4$2.54 million last year.

Other Income for the period amounted to J$16.83 million an increase of 428 per cent from the $3.19 million stated in 2021.

Contraction in expenses

Operating expenses for the year declined to J$365.44 million, a 39 per cent decrease from the J$601.06 million reported in 2021.

Of this:

·      Management fees amounted to $220.38 million (2021: $131.68 million)

·      Corporate service fees totalled $39.19 million (2021: $26.59 million)

·      Other expenses amounted to $93.38 million, (2021: $64.88 million)

·      Performance fees amounted to $12.49 million (2021: $377.91)

As at August 31, 2022, total assets amounted to J$13.79 billion, 58 per cent up from the J$8.75 billion booked in 2021. This was mainly attributed to the significant increase in the value of ‘Cash’ which rose from J$9.10 million in 2021 to J$463.37 million at the end of August 2022, representing a 4,990 per cent increase.

Shareholders’ equity closed at J$7.59 billion relative to shareholders’ equity of J$4.71 billion recorded in the prior year’s corresponding period. This resulted in a book value per share J$40.50 (2021: J$25.13).