Barita Faces challenges but..

Barita280X150Barita Investments profit after tax dropped 21 percent to $46 million for the quarter ending December 2014 compared to the similar period in 2013, from total revenues of $345 million and net operating revenues of $177 million. In 2013, the company that is involved in stockbroker and fund management reported net operating profit of $165 million but increase expenses helped to pull down profit for the quarter.
Interest Income contributed $230 million to revenues, 15 percent below the prior year, while related interest expense remained flat at $168 million.
Barita is suffering from a mixture of assets priced for shorter periods than the funds clients’ invest with them. According to Chairman Rita Humphreys, “in an environment where interest rates have decreased, our liability costs have been similarly reduced resulting in our interest expense decreasing to prior year levels. However, with our investment portfolio comprising of approximately fifty percent variable instruments, our interest income has decreased at a faster rate. This has resulted in a significant contraction in our margins resulting in a recorded net interest income of $62 million, approximately 36 percent down from prior year.”
Fees and Commission income rose 65 percent above prior year to $38 million, with improvement coming from the subsidiary Barita Unit Trusts. Additionally, trading gains were 600 percent above prior year at $48 million compared to only $8 million in 2013. Depreciation of the Jamaican resulted in translation gains of $21 million down from $29 million prior year.
“Staff and administrative expenses contributed to a 16 percent increase in operational costs when compared to the same period last year. Staff costs increased by 10 percent which was triggered primarily by additional human resources and remuneration adjustments. Administrative costs were 25 percent higher than last year, with the main contributors being financial support for our charity arm the Barita Education Foundation and client support expenses,” the report to shareholders stated.
Interest rate developments, with Treasury bill rates continuing to fall and the change in the method relating to the repo business could put further pressure on income for a while. At the end of the quarter fair value reserve amounted to $107 million which could be realised in subsequent quarters and thus boost earnings. Falling T-Bill rates should result in gains in longer term Jamaican fixed interest rates securities and pickup in interest now seen in the Jamaica stock exchange is likely to hand Barita increased fee income during the balance of 2014.

About IC Insider.com

Trackbacks

  1. […] higher than their last selling prices and 5 with offers that were lower. Stocks trading include, Barita Investments closed trading with 151,783 shares to end 11 cents lower at $2.26, Berger Paints had 9,858 shares […]

  2. […] higher than their last selling prices and 3 with offers that were lower. Stocks trading include Barita Investments ending with 320,000 shares trading 6 cents higher, at $2.37, for a 52 weeks’ high. Berger Paints […]

  3. […] with bids higher than their last selling prices and 3 with offers that were lower. In trading, Barita Investments ended trading with 15,380 shares trading to close 5 cents higher at $2.30 as demand chips in for the […]

  4. […] changed hands, ending in 10,246,151 units trading, valued at $38,557,910, in all market segments. Barita Investments traded 6.7 million units valued at $14.37 million with 4 million units being a crossed by Barita […]

  5. […] will lead to lower interest rates and higher asset values. Barita Unit Trust is a subsidiary of Barita Investments a JSE listed […]

  6. […] at $28,055,047, in all market segments and 4 stocks closed at new 52 weeks’ high. In trading, Barita Investments closed with 130,500 shares trading at $2.07, for a 12 cents gain, Caribbean Cement had 26,500 units […]

  7. […] the main market are, Barita Investments with 500 shares trading with a gain of 3 cents to $2.22, Desnoes & Geddes closing with 28,800 […]

  8. […] The last traded prices of stocks with losses at the end of trading in the main market are, Barita Investments finishing with 1,500 units, closed lower by 5 cents at $2.20. Cable & Wireless closing with […]

  9. […] Stocks and Securities sold 10,516,480 of the Caribbean Cream’s shares as the selling broker. Barita Investments bought 10 million of the shares at 74 cents, on behalf of client. The JSE Junior Market Index […]