Despite the devastating economic disruption caused by the novel coronavirus pandemic, Sterling Investments Limited (SIL) was able to record significant growth in its first quarter ended March 31, 2021.

The investment holding company, which is managed by Sterling Asset Management, recorded net profit of $55.2 million, a 1,104 per cent increase when compared with the $4.6 million recorded in the previous corresponding period.

Revenue totalled $80.4 million for the quarter under review, a 63 per cent increase over the corresponding quarter in 2020 ($49.3 million). This was driven by larger foreign exchange gains, and increases in interest income and in the gains on sale of debt securities.

Net interest income increased by 29 per cent from $24.89 million in the first quarter of 2020, to $32.1 million in the period under review, due to the reduction in US interest rates by the Federal Reserve.

This first-quarter performance, the company said in its report to shareholders, was due to SIL’s ability to capitalise on brief spikes in volatility and intermittent market declines to acquire attractive assets and lock in good income and yields for the future.

Total foreign exchange gains rose from $12.308 million to $28.406 million for the period ending March 31, 2021. The Jamaican dollar depreciated by 2.8 per cent in the first quarter of 2021 moving from $142.10 to US$1 as at December 31, 2020 to $146.58 as at March 31, 2021.

Total assets for the period grew by 44 per cent to $2.03 billion, from the $1.41 billion recorded for the corresponding period in 2020, reflecting the growth in value of the existing portfolio and the acquisition of additional assets during the COVID-19 downturn, SIL said.

Additionally, the growth in the size, profitability and value of the investment portfolio contributed to a 53 per cent increase in total equity, from $956.6 million to $1.46 billion as at March 31, 2021.

SIL further indicated that it is well-positioned to benefit from the global economic recovery, and that investors will continue to benefit from the US dollar income SIL’s portfolio generates through dividend payments. SIL invests in fixed income and equity investments across the globe.

“The US economy is projected to grow at a rate of 6.4 per cent in 2021. SIL’s exposure to the developed countries suggests that it will be among the first companies on the local stock exchange to benefit from a global economic recovery,” the company said.

“Central banks in developed economies have committed to accommodative monetary and fiscal policy for the near term. This is likely to continue to drive asset prices higher as investors hunt for yield. In the event that inflation or interest rates rise, the portfolio is well positioned to take advantage of the resultant opportunities,” it said.