May 1, 2019

Barita Investments Limited (BIL) for the first six months ended March 31, 2019, reported a 16% improvement in interest income mounting to $595.92 million relative to $511.74 million for the comparable period in 2018. Interest expense also increased to close at $339.50 million compared to $322.43 million in 2018. As a result, net interest income increased by 35% to $256.42 million relative to $189.31 million in 2018. Management noted the movement was, “underpinned by significant balance sheet growth”.

Dividend income rose 287% to total $19.82 million compared to the $5.12 million earned for the first six months ended March 31, 2018. Gains on sale of investment increased significantly by 652%, to $609.87 million (2018: $81.09 million), while fees & commissions income rose by 73%, to close at $414 million (2018: $239.88 million). According to BIL the, “gain/(losses) on investment activities include $480,163,000 related to equity investments under IFRS 9, which was adopted by the Group on October 1, 2018.” Additionally, BIL noted the growth in fees & commissions income, “was principally driven by the asset management and investment banking business lines. The investment banking business, launched in December 2018, generated fee income of J$159.4 million for the four months to March 2019.”

Foreign exchange trading and translation amounted to a loss of $138.12 million compared to a loss of $25.91 million recorded in the previous year. BIL indicated, “Our local currency strengthened over the reporting period, resulting in the Group realising an increase in foreign exchange translation losses when compared to the same period last year. With the Jamaican dollar closing the period at J$125.02 (the BOJ’s mid-point weighted average buy and sell exchange rates), the segment closed the period with a loss of $196.6 million. The Group has taken a decision to actively manage its foreign currency  exposure with the objective of reducing the volatility of future earnings arising from foreign exchange movements. The foreign exchange trading (cambio) benefited from market conditions, reporting a gain of $58.5 million compared to $21.0 million for the prior period. Other income for the six month period closed at $1.71 million (2018: $616,000), a growth of 177% year over year.”

BIL reported a 137% improvement in net operating revenue from $490.10 million in 2018 to $1.16 billion for the six months ended March 31, 2019. Net operating revenue for the quarter amounted to $769.95 million compared $329.02 million for the same quarter of 2018.

Administrative Expenses for the period recorded an 8% increase to $215.18 million relative to $199.92 million in 2018. Staff costs year to date rose 33% from $170.57 million book in 2018 to $226.10 million.  Management noted year to date, “we continued to add human resources to support our growth agenda.” BIL reported a IFRS 9 Provisioning of $22.34 million year to date relative to nil in 2018. Total expenses for the period recorded a 25% growth to close at $463.61 million versus $370.49 million in 2018. Total expenses for the quarter amounted to $261.30 million, 28%above the $204.10 million reported for the corresponding quarter of 2018.

Profit before tax amounted to $700.07 million relative to a profit before taxation of $119.61 million in 2018.

Following taxation of $183.37 million (2018: $70.24 million), the company reported net profit of $516.71 million, relative to the profit of $49.37 million booked in 2018. Net profit for the quarter amounted to $408.28 million compared to $88.14 million for the prior year’s similar quarter.

Earnings per Share (EPS) for the period ended March 31, 2019 totalled $0.73 relative to an EPS of $0.07 in 2018. EPS for the quarter amounted to $0.58 in contrast to $0.12 for the same quarter of 2018. The trailing earnings per share amounted to $1.17. The number of shares used in our calculations amounted to 445,876,824 units. BIL stock price closed the trading period on February 4, 2019 at $51.53.

 

Balance Sheet at a glance:

As at March 31, 2019, total assets amounted $27.68 billion (2018: $16.13 billion), an $11.55 billion improvement as a result of the growth in “Marketable Securities” which increased by 214% to a total of $8.16 billion (2017: $2.60 billion). Cash balances also contributed to the increase in the asset base to $3.88 billion compared to $691.31 million twelve months earlier.

Shareholders’ Equity amounted to $7.79 billion relative to $2.86 billion in 2018 resulting in a book value per share of $11.00 relative to $4.04 in 2018. BIL noted, “The sharp rise in total equity was the result of inflow of $4.1 billion in new share capital from the rights issue as well as a $994.9 million rise in retained earnings.”

 

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