Mayberry Jamaican Equities makes second-quarter profit of $194 million
Higher operating expenses eat away profitabilitySunday, July 11, 2021
BY DURRANT PATE
Mayberry Jamaican Equities (MJE) experienced a profitable second quarter in June arising from the continued rebound of the local financial market and favourable performance of anchor stocks in its equities portfolio.
The company recorded a net profit of $194 million for the April to June 2021 quarter. This performance mainly resulted from increased unrealised gains of $214.8 million on investment securities and dividend income of approximately $85 million.
The operating results improved by $231.5 million over the corresponding period in 2020 during the onset of COVID-19. However, total operating expenses were higher by $31 million, resulting from higher performance fees and costs associated with business process improvements.
Revaluation of the equities drove improved performance
The improved results for Q2 2021 were primarily attributable to the revaluation of the equities classified as fair value through profit or loss (FVPL). For the April to June 2020 quarter, MJE recorded a net loss of $37.4 million.
The company recorded a total comprehensive income of $3.2 billion for the three-month period compared to a total comprehensive income of $775 million for the comparable period April to June 2020. This performance will continue to improve as consumer confidence grows and local and global markets recover, following the worldwide roll-out of COVID-19 vaccination programmes.
Net revenues for the quarter under review amounted to $243.2 million reflecting an increase of $251.7 million over the corresponding 2020 quarter. This performance resulted from higher unrealised gains on investments.
Operating expenses up
Total operating expenses for the second quarter increased by $31 million compared to the corresponding quarter in 2020. The majority of this increase relates to management fees resulting from the significantly improved performance, and costs associated with business process improvement.
For Q2 2021, MJE's operating costs relative to net revenues stood at 20 per cent. Managing Director Natalie G Augustin reported that, “the 2021 performance continues to reflect significant improvement following the December 2020 close at $9.89. MJE's stock price closed at $9.31 on June 30, 2021, representing a 16.3 per cent appreciation when compared to that of June 30, 2020.”
MJE purchased stocks for April to June 2021, valuing $126.8 million compared to $129.7 million for the corresponding period in 2020. At the same time, MJE volumes traded on the Jamaica Stock Exchange (JSE) were 28.23 million units versus 63.65 million units compared to the corresponding period for the prior year.
During the second quarter, MJE was listed in the JSE's top 10 advancing stocks for the month of March 2021.
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