Profit at Barita Investments doubled for the nine months to June this year, compared to same period of previous year. Profit amounted to $156 million against $79 million but profit for the latest quarter was down from $99 million in 2013 to $63 million before tax. After tax, profit dropped to $51 million versus $99 million in 2013, a period when no tax was booked.
The big turnaround in the nine months figures, is due mainly to a huge hit the 2013 profits got when Barita entered into the debt swap arrangement, with government of Jamaica, in the March quarter of 2013. There was no such charge in 2014.
The bottom-line performance came from net interest income that declined from $327 million for the 9 months to June 2013, to $260 million in the 2014 period and from Non-interest income of $249 million, up from $205 million, excluding a loss on investments of $117 million in 2013.
For the quarter, net interest income amounted to $75 million, compared with $78 million in the June quarter of 2013 and non-interest income of $105 million versus $117 million in 2013. Fees and commission income rose, Rita Humphrey-Lewin stated in her comments on the results that the launch of a new unit trust scheme in April, contributed to fee income. Foreign exchange earnings while slightly up in the June quarter over that of 2013, is down to $108 million from $125 million in 2013. Dividend income fell as well, form $20 million for the nine months last year, to $10 million.
Gains also came as a result of trading opportunities in an improved international market, Humphreys-Lewin said, in addition, the depreciation of the Jamaican dollar against the three major international currencies returned $109 million in foreign exchange gains for the year to June, but that was lower than the $125 million enjoyed in 2013.
Administrative costs, fell 9 percent from $172 million in the 9 month period of last year, to $156 million this year, but was up from $39 million in the 2013 quarter to $56 million in 2014. Staff costs is up 9 percent in the June quarter as well as for the nine months to $179 million, for the year to June.
Earnings per share for the June quarter was 11 cents compared to 22 cents from the June 2013 quarter, Barita should end up with earnings per share around 46-50 cents for the 2014 fiscal year and looks like improving that in 2015 all things being equal.
Barita’s assets grew for the nine months to June to $13.5 billion from $13.3 billion last year, over the same period shareholders’ equity grew from $1.3 billion to $1.6 billion.
Barita recovering slowly from Debt swap
August 13, 2014 by
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[…] at $60.60 and Scotia Group closed with 2,324,106 shares trading, with a gain of 30 cents to $20. Barita Investments was the broker selling the most Scotia shares, and NCB Capital Market, the broker purchasing the […]
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[…] The last traded prices of stocks with losses at the end of trading in the main market are, Barita Investments with 6,777 shares, lost 1 cents to end at $2.18, Kingston Wharves traded just 5,000 units at $6.30, […]
[…] Barita Investments had a decent nine months’ performance to June this year, with profit of $156 million versus $77 million in 2013. Profit had dipped for the June quarter from that of 2013 by just under 50 percent. The net result was earnings per share of 35 cents. With those results investors would be forgiven if they felt that full year’s earnings would be closer to 50 cents per share than the 16 cents they reported. That company reported a loss in the September quarter of $66 million down from a profit of $24 million in 2013, pulling full year results to $71 million compared to $63 million in 2013. Major contributors to the final quarter’s loss, are increased taxation of $26 million, with a loss before tax of $40 million. Investment impairment resulted in $42 million hit against profit while securities and foreign exchange trading ended up in losses and dividend income fell by $19 million. Net interest income dropped sharply as well, by 60 percent to $45 million while administrative cost was up 17 percent. Barita also picked up a loss of $10 million from an investment in an animated development company GSW Animated Ltd. Barita’s investment in the company is $28 million, for 11.84 percent interest. For the full year interest expense rose 21 percent but income fell marginally, while income from fees, commission and securities trading were the only areas to show growth. Cost was kept pretty tight with only a 4 percent rise. In 2013 Barita took a big hit on its investment portfolio when it swapped Government bonds for lower yielding ones, resulting in a write off of capital gains on their holdings. Interest rates rose between 2013 and mid 2014 resulting in a squeeze on interest margins. Some of the reduction on the interest income side was made for by a switch to foreign exchange holdings to benefit from the devaluation of the local dollar. Revaluation of the Jamaican dollar in the September quarter would have negatively affected return in this area. The local dollar slipped in the December quarter which should benefit them. Economic measures being pursued by the Jamaican government along with the sharp drop in oil prices will lead to greater stability or possible some revaluation of the local dollar in the months ahead. This will likely result in a portfolio shift that will improve net interest income. The local stock market is showing signs of improved interest and if this continues, trading income will improve for 2015 and the large investment impairment hit should not occur. The end result is that the company should enjoy better results in 2015. Of import is the higher level of profitability, shown in comprehensive income statement, with gains of $242 million excluding revaluation gains on property. The increased comprehensive income resulted in the capital base of the company rising to $1.67 billion from $1.4 billion at the end of the 2013 fiscal year. Total assets being managed is $13.6 billion. Barita should be seen a good play on the revival of the local stock market which is going to happen at some time in the near future, exactly when is unsure at this time, based on valuation and performance of companies it may not be far off. The company’s stock is listed on the Jamaica Stock Exchange and last traded at $2.18 with net assets of $3.75 per share. Profit may have slipped in 2014 but that is not an indication of a permanent slippage as such the stock remains BUY RATED based on it low price and the potential for higher earnings ahead. […]