PanJam Investment Limited boasts a long track record of consistent and growing profits based on a diversified portfolio of investments.
Net profit attributable to shareholders for the nine months ended September 30, 2017 is up 2% relative to last year. This is largely the effect of stronger results from associated and joint venture companies, led by Sagicor Group Jamaica, and improved operating profit in the current year, offset by one-off gains last year on disposals of associated and joint venture companies.
The third quarter’s highlights are:
Net profit attributable to shareholders of $1,215 million (2016: $1,316 million) for the quarter and $2,974 million (2016: $2,905 million) for the nine months
Return on opening equity (annualized) of 15% (2016: 18%)
Basic earnings per stock unit of $1.16 (2016: $1.25) for the quarter and $2.83 (2016: $2.77) for the nine months
Book value per stock unit of $27.27 at September 30, 2017 (December 31, 2016: $24.43)
Ordinary dividends of $0.60 declared and paid through September 30, 2017 (2016: $0.45)
Net profit attributable to owners for the quarter ended September 30, 2017 amounted to $1,215 million, compared to $1,316 million in the 2016 3rd quarter, a decrease of 8%, equivalent to basic earnings per stock unit of $1.16 compared to $1.25 for the same period in 2016. Net profit attributable to owners for the nine months ended September 30, 2017 amounted to $2,974 million, 2% above the 2016 comparable figure of $2,905 million, equivalent to basic earnings per stock unit of $2.83 in 2017 and $2.77 in 2016.
During the third quarter of 2016 the group completed an exchange of securities that resulted in the divestment of its shareholding in Mavis Bank Coffee Factory Limited. This resulted in a gain on disposal in the quarter of approximately $665 million, which, net of minority interest, increased net profit attributable to shareholders by $416 million. The 2017 Q3 net profit attributable to shareholders of $1,215 million represents an increase of 35% over Q3 2016 absent this gain.
Investment income in the third quarter of 2017 was $202 million versus $76 million in the prior year. The improvement mainly reflects higher dividend income, realized and unrealized gains, while last year’s results were depressed by certain impairment charges. Year to date investment income of $332 million is 38% ahead of last year ($240 million), due to improved realized and unrealized gains, dividend income and impairment losses, which offset reduced foreign exchange gains.
Property income increased by 24% for the quarter to $388 million from $312 million in 2016, and by 22% for the year to date moving to $1,119 million from $918 million. Higher rental income resulted from more space leased on average as well as contractual rate increases; revaluation gains benefited from improving occupancy; and net lease income (i.e. expense reimbursement) was driven higher mainly by increased utility costs.
Other income for the quarter increased to $41 million from $23 million driven by collection of amounts previously written off, but is flat for the year to date because of non-recurrence of one-off fee income.
Group operating profit for the third quarter more than doubled to $291 million compared to $93 million during 2016, driven by the improvements in investment, property and other income partially offset by higher operating expenses (up 7% to $353 million from $329 million).
Finance costs for the year to date increased by $53 million to $441 million, resulting mainly from higher average debt balances.
Our segment results show the nine-month profit before tax of the property segment improving to $247 million in the current year from $149 million in 2016. The investments segment posted profit before tax of $2,644 million versus $2,900 million in 2016, though 2016 included $851 million in one-off gains on disposal of associated and joint venture companies.
Associated and Joint Venture Companies
The results of associated companies consist principally of our 31% 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”). Our share of results from our 50% stake in Kingchurch Property Holdings Limited, a real estate joint operation currently in its development phase, is consolidated within operating income and expenses.
Our share of results of associated and joint venture companies for the third quarter was $1,115 million, bringing the year to date total to $2,966 million versus $2,426 million for 2016, an increase of 22%. This includes the nine-month total share of earnings from Sagicor of $2,839 million, 23% higher than the prior year figure of $2,307 million. Sagicor’s improved results reflect strong performances in employee benefits and individual insurance lines as well as reserve releases now effected on a quarterly basis.
New Castle, Caribe and Chukka all performed satisfactorily during the period.
Total assets at September 30, 2017 amounted to $36.4 billion, compared to $32.4 billion at December 31, 2016, an increase of 12%. Stockholders’ equity increased 12% to $28.7 billion (December 31, 2016: $25.7 billion), which equates to a book value per stock unit of $27.27 (December 31, 2016: $24.43).
The fluctuating nature of JA-US exchange rate movements and the relaxation of surrender requirements for dealers and cambios provide additional evidence of the improving macro-economic context in Jamaica. We are also encouraged by the steady improvement in the unemployment rate, reportedly 11.3% as at July 2017 versus 13.7% as recently as April 2016.
As more Jamaicans achieve the security of stable earnings through employment, there will be a positive effect on two elements vital to improved living conditions: faster growth and reduced crime.