Stanley Motta records FX losses in September quarter

Business

Stanley Motta records FX losses in September quarter

Big jump in admin expenses as revenues increased by 10.1% to $343.9 million

Sunday, November 22, 2020

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Real estate rental company Stanley Motta suffered heavy foreign exchange (FX) losses in the September quarter, resulting in a big jump in administrative expenses.

The company saw its losses from FX amounting to $48.74 million arising from the revaluation of its loan from the Development Bank of Jamaica, Special Economic Zone fees, as well as rising cost for repairs and maintenance. This was compounded by the cost associated for the additional personal safety requirements based on the company's response to the novel coronavirus pandemic.

The year-to-date administrative expenses jumped by 48.4 per cent, moving from $109.9 million for the first nine months of the 2019 financial year to $163.2 for the comparable period in 2020. Similarly, there was 14.8 per cent increase for the quarter ended September 30, 2020 when compared to that of September 30, 2019, moving from $43.5 million to $49.9 million for the quarter under review.

YEAR-TO-DATE REVENUE

Revenue for the nine-month period ended September 2020 increased by 10.1 per cent moving from $312.4 million in 2019 to $343.9 million. For the September quarter, Stanley Motta recorded revenue of $117.8 million, which represents a 10.9 per cent increase over $106.2m recorded for the same period in 2019.

These increases are mainly attributable to the devaluation of the Jamaican dollar which moved from an average of J$136.69 to 1US$ as at September 30, 2019 to J$143.95 to 1US$ at September 30, 2020.

Net operating income (NOI) declined year over year, moving from $203.2 million for September 2019 to $186.1 million for September 30, 2020. This is a 8.4 per cent decrease.

The decline is due to the year-to-date impact of the foreign exchange loss. Stanley Motta reports that without this loss, the company would have realised NOI of approximately $234.8 million for the nine-month period ended September 30, 2020.

Funds from operations year-to-date totalled $155.1 million coming from $167.5 million generated for the same period in, a 7.4 per cent decrease. The decline in funds from operations was attributed to the year-to-date increases in administrative expenses.

Net profit margin for the September quarter 2020 stood at 46.8 per cent with the year-to-date figure coming out at 43 per cent. The directors report that, “this demonstrates the company's commitment to maintaining strong operational efficiency, while continuing the collection of rent in a timely manner.”

They advised shareholders that the company is expecting small fluctuations in its financial results through to the end of the financial year, based around earning rent in US dollars, continuing with close to 100 per cent occupancy and maintaining the status quo until year end.


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