PanCaribbean reports strong 1Q results

PANCARIBBEAN Group yesterday reported a first-quarter consolidated net income of $396.9 million which, it said, was up 14 per cent over last year’s $349.1 million.

Earnings per share were $0.72 for the current quarter versus $0.64 for the comparative period, the group said.

The main contributor to the improved results was the 23 per cent increase in net interest income, which grew from $562 million to $692 million, reflecting Pan Caribbean Financial Services’ (PCFS’) ability to cut the interest expense more steeply than the fall-off in interest income. Interest income fell by $167 million versus a $296 million drop in interest costs.

“Non-interest income for the period fell 28 per cent from $259 million to $187 million,” the Group said in a news release.

http://www.jamaicaobserver.com/business/PanCaribbean-reports-strong-1Q-results_7633411

Pan-Jam profits slump 23 per cent on forex, interest rates losses

Maurice FACEY… Pan-Jam chairman

PAN-Jamaican Investment Trust Limited (Pan-Jam) is reporting a 23 per cent reduction in profit for the March 31, 2010 quarter as a result of foreign exchange losses, a general reduction in earnings from related companies and inflationary pressures on the group.

The Group, which comprises of Pan-Jam and related companies, First Jamaica Investments Limited (FJIL), Sagicor Life Jamaica (SLJ) and Jamaica Property Company (JPC), recorded a first-quarter fall in profits from J$408 million to J$313 million over corresponding periods of March 2009 and 2010. In the report to stockholders, Pan-Jam Chairman Maurice Facey indicated that the performance was most notably impacted by the first-quarter decrease in earnings of FJIL, which had a J$112 million gain on US dollar-denominated investments in the first quarter of 2009. That gain now absent as a result of the stability of the Jamaican dollar relative to the US dollar in the March 2010 quarter, has caused the group’s investments income to decline 60 per cent from $197.8 million to $78.4 million.

http://www.jamaicaobserver.com/business/Pan-Jam-profits-slump-23-per-cent-on-forex–interest-rates-losses_76332

Pan-Jamaican Investment Trust Limited

Extract from unaudited financial results

“The FJI group’s reported investment income in the first quarter of 2009 was boosted by a foreign exchange gain of $112 million on US dollar denominated investments consequent on a 10% decline in the value of the Jamaican dollar.

The stability of the Jamaican dollar in the 1st quarter of 2010 has resulted in no reported foreign exchange gains this year. Secondly, its share of results of associated company, represented by its 24.4% investment in Sagicor Life Jamaica Limited (SLJ), declined by $100 million (28%) to $253 million.

SLJ’s 1st quarter 2009 results benefited both from reported foreign exchange gains as well as a release of actuarial reserves consequent on higher interest rates as at the end of the first quarter of 2009, neither of which items recurred in the 2010 1st quarter. Absent these items, SLJ would have reported a 20% improvement in core earnings.”

Hardware & lumber limited

Extract from unaudited financial results March 31, 2010

“For the three months ended March 31, 2010, revenues were $1,435 million and net losses were $10 million compared to $1,504 million and $113 million, respectively, for the comparative period in 2009. The significant improvement in the quarter’s results was due to the impact of cost savings, as well as reduced finance costs following a reduction in US dollar denominated debt and reduced volatility in the Jamaican dollar against the US dollar. The results for the first quarter continue to reflect the effects of the general economic slowdown.”

Jamaica Producers Group Limited

Extract from unaudited group results (13 weeks ended April 3, 2010)

“In our 2010 First Quarter, Jamaica Producers Group Limited (“JP”) delivered improved results for the 13-week period ended April 3, 2010. Our net profit attributable to stockholders was up 76 percent relative to the comparable period last year. Moreover,

We increased our stockholders equity per stock unit during the quarter by 18 percent.

The continued growth in profitability was achieved against a backdrop of heightened economic uncertainty in Europe and in our main Caribbean markets. We remain alert to the potential adverse impact of currency weakness in Europe and softening consumer confidence in Jamaica and our business plan has proved to be robust despite these challenges.”

SVL challenged to stimulate interest in lottery games

President and CEO of SVL, Brian George said in a statement on the financial results that the increase in net profit shows that “the company continues to enjoy strong public support for its products and services”.

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Brian George… president and CEO of SVL

He said an overall increase in revenue of $56 million compared to the quarter of 2009, at which point total revenue was $6.35 billion, is indicative of this support and a “very positive achievement in the current economic climate”.

However, earlier this month, George said that SVL was being challenged to continue to stimulate interest in its lottery games because of the global saturation of the lottery market. George said that players of the lottery had become more mature, demanding larger jackpots than those currently offered.

“…20 years ago if you heard about a $20-million jackpot you had lines down the street,” George said at a meeting of the American Chamber of Commerce (AMCHAM) earlier this month.

“Now people don’t care. It takes in the United States about US$300 million to get the market truly excited. Now that is beginning to become saturated so it may take another substantial coalition of lotteries to be able to get people really excited.”

While SVL has its own consolidated lottery, the Super Lotto, there has not been a winner so far. However, a win in the local Lotto Game of $240 million, the highest ever in the history of the jackpot was claimed within the first quarter.

Nonetheless, when compared to the year-earlier levels SVL’s revenue from the lottery segment decreased by $27 million to $5.6 billion during the review period. Segment results, however, show a 7.2 per cent increase in profit for the March 2010 quarter from $237 million to $255 million, bolstered by a corresponding 7.5 per cent reduction in the amount paid out in prizes, the total claims on lottery prizes moving from $4.1 billion in the March quarter of 2009 to $3.8 billion during the three months to March 31, 2010.

The tenuous nature of the lottery segment aside, the largest percentage increase in revenue for SVL came from its pin codes and phone cards sales, with an increase of 27 per cent to $479 million compared to March 2009 at which point, pin codes revenue was $376 million.

Losses continued, however, in its gaming and hospitality segment, which incorporates room, restaurant and bar related guest services provided through the Acropolis gaming lounges. Losses were lowered from $94.3 million for the March 2009 quarter to $62.2 million in the March 2010 quarter.

The financial services segment, which comprises foreign exchange dealer services and commissions from Money Gram services also posted losses of $506,000 for the quarter under review. According to George, this loss was attributable to expenditure on constructing a corporate office at the CitiGroup, New Kingston building. Additionally, SVL reports that the appreciation of the Jamaican dollar relative to the US dollar resulted in decreased spreads in foreign exchange trading, further contributing to the losses. Foreign exchange losses were $817,000 at the end of the quarter, compared to a gain of 6.8 million at the quarter of 2009.

Mayberry Investments, a major beneficiary of  Access’ success on the Jamaica Stock Exchange Junior Market

Access Financial Services Limited posted a 199 per cent increase in net profit in their first quarter for the period ended March 31, 2010 over the comparative period last year, while the value of its stock is closed at 189 per cent higher than it listed last October.

The microlender recorded net profit of $39.16 million up from $13 million in the March quarter of 2009 reflecting overall better results from its operations even while pretax profit rose from $20.4 million to $39.16 million over the comparative periods.

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Marcus James – President and CEO

A major beneficiary of the Access’ success on the Jamaica Stock Exchange Junior Market is Mayberry Investments Limited (MIL), which in 2006 paid $38.4 million for its stake in the company that is now valued at $570 million even after dropping 10 per cent ownership in the company in the public offer.

Access’ primary business, which involves lending money to consumers and small businesses and which the company plans to expand, is highly profitable. For instance, during the six months to June 30, 2009, the firm was able to secure net interest margin of 86 per cent, that is, the cost of loans which yielded $128 million in interest income for Access was only $18 million, so the company was able to make $112 million in net interest income.