PanJam Investment Limited boasts a long track record of consistent and growing profits based on a diversified portfolio of investments.
Q2 2018 Financial Highlights
Net profit attributable to stockholders of $982 million (2017: $929 million) for the quarter and $1,809 million (2017: $1,759 million) for the six months
Return (annualised) on opening equity of 12% (2017: 14%)
Earnings per stock unit of $0.93 (2017: $0.89) for the quarter and $1.72 (2017: $1.67) for the six months
Ordinary dividends per stock unit of $0.50 declared and paid through June 30, 2018 (2017: $0.40)
Book value per stock unit of $29.51 at June 30, 2018 (December 31, 2017: $29.03)
Our net profit for the six-month period ended June 30, 2018 is 3% higher than the comparable period last year, mainly resulting from improved property income.
Net profit attributable to shareholders for the quarter ended June 30, 2018 amounted to $982 million (2017: $929 million), an increase of 6%. Earnings per stock unit were $0.93 (2017: $0.89). Net profit attributable to shareholders for the six months ended June 30, 2018 amounted to $1,809 million, compared to $1,759 million for 2017, an increase of 3%, equivalent to earnings per stock unit of $1.72 compared to $1.67 for 2017.
Performance for the quarter was influenced positively by increases of $83 million and $81 million in income from investments and property respectively and a gain on disposal of $47 million related to one of our Canadian investments. These offset declines of $23 million in other income and $78 million in share of results of associated companies and an increase of $41 million in operating expenses. Performance for the year to date was influenced positively by increases of $15 million and $174 million in income from investments and property respectively as well as the aforementioned gain on disposal. These offset declines of $27 million in other income and $41 million in share of results of associated companies and increases of $79 million and $31 million in operating expenses and finance costs respectively.
Group operating profit improved for the quarter and year to date by $99 million and $83 million respectively compared to 2017. The improvement in investment and property income more than offset lower other income and increased operating expenses.
Property income improved during 2018 due to increases in rental and net lease income and property revaluation gains. Investment income benefited from foreign exchange and unrealised capital gains and higher dividend income more than offset lower interest income and realised capital gains. Other income is lower as 2017 included recovery of amounts previously provided for. Operating expenses have increased due mainly to higher electricity rates and additional property added to the portfolio as well as higher professional fees and irrecoverable GCT.
The results of associated companies consisted principally of our 32% investment in Sagicor. We also hold minority positions in New Castle Company Limited (owners of the Walkerswood and Busha Browne lines of sauces and seasonings), Caribe Hospitality of Jamaica Limited (owners of the New Kingston Courtyard Marriott Hotel) and Chukka Caribbean Adventures (“Chukka”). Investments made in certain Canadian limited partnership structures are also required to be treated as associated companies under accounting rules.
Our share of results of associated companies decreased for the quarter by $78 million to $955 million (2017: $1,033 million) and for the six-month period by $41 million to $1,810 million (2017: $1,851 million). Our share of earnings from Sagicor for the period decreased by $118 million (7%) to $1,648 million. Sagicor’s half year results reflect strong new business growth and improved results from commercial banking, but were impacted in particular by impairment charges on Barbados sovereign bonds and realized losses on certain securities. . Newcastle and Caribe performed satisfactorily during the period while Chukka’s performance dipped.
During the second quarter, we exited one of our Canadian investments, treated for accounting purposes as an associated company, with $47 million reflected in a gain on disposal and $82 million included in our share of results of associated companies.
Total assets at June 30, 2018 amounted to $39.9 billion, compared to $39.4 billion at December 31, 2017. Stockholders’ equity increased to $31.1 billion (December 31, 2017: $30.5 billion), which equates to a book value per stock unit of $29.51 (December 31, 2017: $29.03).
The outlook on Jamaica’s rating as a long-term bond issuer was upgraded in July by Moody’s from stable to positive. The rating agency noted the commitment to continued fiscal consolidation and improving policy effectiveness, observations that we have shared and that cause us to feel optimistic. Indeed, the upgraded outlook implies that further rating improvements are likely if discipline is maintained.
On the other hand, the Prime Minister recently highlighted the need for regulatory and bureaucratic systems to operate with improved efficiency and alacrity, speaking specifically about construction approvals. This is a challenge that we have repeatedly pointed to as one that will have to be overcome if Jamaica is to achieve higher levels of economic growth. We are heartened by this acknowledgement, at the highest level of government, of the seriousness of the issue and we look forward to the rapid announcement of specific initiatives that will address the problem holistically and effectively.