High six-month earnings for Sterling Investments
Despite the devastating economic disruption caused by the novel coronavirus pandemic, Sterling Investment Limited (SIL) was able to record significant growth in the six month ended June 30, 2021.
For the period under review, SIL recorded an unaudited net profit of $104.3 million, an increase of 40 per cent when compared with the $74.4 million recorded in the corresponding period last year.
Revenue also increased by 23 per cent to $161.8 million for the six-month period.
This performance, according to SIL in its report to shareholders, was driven primarily by the increases in interest income, and gains on sale of debt investment securities, the latter a result of increased profit taking in its portfolio.
The investment holding company, which is managed by Sterling Asset Management, invests primarily in an array of fixed income securities and private equity investments denominated in US dollars.
SIL indicated that total foreign exchange gains rose from $64.3 million for the six-month period to $77.7 million. It added that the Jamaican dollar depreciated by four per cent in the first half of 2021, moving from $142.10 per US$1 as at December 31, 2020 to $148.51 as at June 30, 2021.
Total expenses for this period increased from $36.92 million to $50.31 million as a result of higher management fees, owing to the increase in value of the asset base and higher professional fees, the company said.
Total assets as at June 30, 2021 stood at $2.2 billion, 34 per cent up from the $1. 7 billion recorded as at June 30, 2020, reflecting the growth in value of the existing portfolio and the acquisition of additional assets during the economic downturn.
Total margin loans also increased by 31 per cent from $471.5 million to $617 million for the period under review.
SIL noted that it increased its use of low-cost margin to finance the acquisition of attractive fixed income assets over the period, and the growth in the value and profitability of the investment portfolio contributed to a 35.9 per cent increase in total equity, from $1.2 billion to $1.6 billion as at June 30, 2021.
