Barita blowout profits

Barita Investments is reporting a huge jump in profits for the third quarter and the nine months to June compared to the similar periods in 2018 as revenues surged to record levels under new management.
For the quarter, profit after tax jumped 594 percent from just $131 million in 2018 to $911 million with the nine months ending with $1.43 billion up 691 percent from just $181 million in 2018.
Revenues net of interest cost, leaped 371 percent to $1.65 billion for the quarter from $352 million a year ago and to $2.8 billion for the nine months, up 234 percent from $842 million in 2018.
For the quarter and year to date, the company record strong improvement in revenues in every major category but gain on investment activities was the most outstanding, with revenues rising to $626 million in the quarter from just $31 million in 2018 and from $112 million for the nine months in 2018, it jumped 1,073 percent to $1.24 billion. While investments brought in a pile, they can be volatile as gains or losses are subject to market gyrations from time to time. Going forward there are no certainty that gains will be at the above levels. The company also recovered $312 million in investments losses incurred earlier in the year, of which $310 million is accounted for in the third quarter.
Expenses rose sharply but at a much slower pace than income, with the quarter seeing cost of $365 million including impairment and expected credit losses of $58 million against $171 million in 2018 while the nine months incurred cost of $829 million versus $542 million in 2018.
The company earned $1.44 per share for the quarter and $2.26 for the period to June and seems on course to record profits closer to $4 for the full year. More importantly, the latest quarter’s earnings suggest 2020 earnings could be in the $6 region all things being equal.
Barita ended the quarter with assets of $31 billion, up from $17 billion in 2018 with shareholders’ equity of $9.3 billion and securities sold under repurchase agreements amounting to $19.5 billion which grew from $12.3 billion at march 2018.
Barita is not satisfied with their outstanding achievement so far. The company will be going back to market to raise around $4 billion by way of a renounceable rights issue to help fund an acquisition.
The stock traded on the Jamaica Stock Exchange at $45 at a PE ratio around 11 times 2019 earnings compared to an average of 15.5 for the overall main market.

About IC