DESPITE the DoubleTree by Orlando (DTO) property seeing a complete rebound from the novel coronavirus, Sagicor Real Estate X Fund Limited’s second quarter was dragged into a net loss as higher interest rates impacted the fair value of its investment portfolio.

The St Lucian international business company, with a focus on real estate, saw its second-quarter total revenue marginally down at $1.63 billion as the group recorded a $273.37-million net capital loss which negated the contribution of DoubleTree by Orlando that saw revenue grow by 60 per cent to $1.84 billion. The investment portfolio consists of units in the Sigma real estate portfolio — which was up 0.94 per cent for the quarter — Government of Jamaica bonds and short-term deposits.

DoubleTree by Orlando recorded 94 per cent occupancy levels during the quarter, which was above the pre-pandemic occupancy recorded in 2019. The hotel earned $158.77 million in net profit for the quarter and a year-to-date profit of $290.42 million which exceeded the $283 million in 2019. At the same time it spent $112.21 million on property, plant and equipment in 2022.

“For the quarter ending 30 June 2022 the group experienced improved performance from its shift in strategy and business model, which has cushioned some of the adverse financial results amidst variants and global supply chain issues. Despite inflation, recession concerns, and the resultant effects on consumer spending, the latest US travel forecast projects that travel will remain resilient. This is backed by domestic leisure travel spending which, even after being adjusted for inflation, has surpassed pre-pandemic levels,” the shareholder report signed by Christopher Zacca and Bruce James stated.

With expenses rising by 36 per cent to $1.64 billion on the rebound in business for DoubleTree by Orlando, the group recorded an operating loss of $9.20 million. After taxation charges, the X Fund’s net loss amounted to $71.46 million for the quarter. The group has a year-to-date net profit of $110.16 million compared to a loss attributable to shareholders of $47.39 million at the end of the comparable period a year ago.

X Fund’s total assets declined by 19 per cent since the start of the year to $25.37 billion, which was largely driven by the wind-up of Jamziv Mobay Jamaica Portfolio Limited during the quarter. This resulted in the cancellation of a promissory note issued by the Sagicor Real Estate Global Fund and removal of $5.77 billion in non-controlling interest. X Fund (company) had a promissory note liability of $7.63 billion at the end of 2021 which leaves the company debt-free, with its subsidiaries holding $6.96 billion in debt. The existing asset base is far from the $49.22 billion it held at the end of 2019.

Total liabilities declined one per cent to $8.87 billion while shareholders’ equity is down to $16.50 billion. The company’s share price is down three per cent year to date to $8.20, which leaves it with a market capitalisation of $18.39 billion. There were only four bid orders and 12 ask orders at the end of Monday. X Fund’s share price had hit a closing high of $16.97 in February 2019 and sank from $9.50 on March 2, 2020 to $6.57 on March 9. The Sagicor Sigma Equity fund bought 2,930,003 shares during the quarter.

Zacca is no longer the chairman of the board as of August 1 with Vinay Walia serving as the new chair. Carlton Barclay was also appointed as a director on the same day.

“X Fund continues to carefully monitor and assess the current economic environment. The group is committed to the health and wellness of our team, clients, and stakeholders by implementing a multidimensional approach to safeguard health, minimise risk and ensure business continuity,” the report closed.