QWI portfolio partially recovers in third quarter

QWI portfolio partially recovers in third quarter

BY DAVID ROSE

Friday, August 07, 2020

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Investment company and subsidiary of the Jamaica Teas Group, QWI Investments Limited, recently posted its first quarterly results since being listed of $115.4 million for the quarter ending June 30, 2020.

After listing on the Jamaica Stock Exchange (JSE) at the end of September 2019 and taking a massive loss, due to their associated holdings, over the first six months of this year, QWI found a solid footing in their investment portfolio during the quarter.

Total income grew by five per cent to $128.9 million, mainly attributable to gains from investment activities, with unrealised currency translation gains and dividend income. QWI's realised losses (sold stocks below purchase price) from their Jamaican portfolio totalled $33.5 million with their US portfolio amounting to $18.5 million in realised gains for a net realised loss of $15 million for the period.

With QWI's US portfolio giving better returns for the year so far, chairman of Jamaica Teas and QWI, John Jackson, gave an explanation of their approach to the US market recently and plans for the future.

“We took a defensive position to the market as we weren't sure how things were going to pan out. We sold down some of those shares and kept portions of them such as Apple.

“The issue with the US market is that it's very liquid and things go up and come back down quite quickly.

“While it may offer some good opportunities, it can be quite volatile sometimes. We [investment committee] meet regularly and observe the market daily so we can take positions. That was a defensive position we took in light of our concerns with the coronavirus in the US,” Jackson shared with this publication

Administration expenses and finance costs declined by 24 per cent to $13 million for the quarter. Net profit went up by nine per cent over the same period, but the company's earnings per share fell from $0.23 to $0.09 due to the increase in number of shares related to their initial public offering. Despite this impressive quarterly performance, the company's overall six-months results were still in the red at a $461.1 million loss.

Total assets for the company were up by 104 per cent, over the same period last year, to $1.49 billion, but down for the financial year's peak of $2.56 billion due to the massive market decline in recent times.

Total liabilities declined by 46 per cent to $83 million, compared with the June 2019 quarter as current liabilities and loan balances shrank.

Although the results for the year haven't been in QWI's favour, Jackson remains optimistic about the company's fortunes as they secured new holdings during the quarter with even Jamaica Teas increasing their QWI stake by an additional 3.5 million units.

“We still see opportunities in the local market, and we are in a better position to identify a stock which will double in the near to medium term,”Jackson replied.

David Rose is a chemistry student at The University of the West Indies, Mona. You can find him on Twitter (@jcknight2), e-mail jcdrconsult@gmail.com and find his contributions on www.everymickle.com. H e is an analyst who also appears on Taking Stock which is on Youtube.


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