Stephen Facey, Chairman & Chief Executive Officer for PanJam Investment Limited is assuring shareholders that PanJam has spent decades creating a robust balance sheet, specifically for times such as these, noting that following many successful years, the company is well-positioned to withstand the impact of this unexpected and unprecedented shock.

This as PanJam is reporting its first-quarter results reflecting the impact of the global COVID-19 pandemic on investment holding companies. As with most economic downturns, attractively priced investment opportunities will arise and that they do not expect current circumstances to be any different. As such, they will seek above-average returns in the short term, in order to create greater shareholder value in the long term, he reported he reported to shareholders.

Commenting further he noted that real estate holdings have proved to be their most resilient assets and that in the long term, properties will continue to hold significant value, underpinned by strong relationships with their tenants.

Associated companies are challenged to repeat prior performances, and each will have to make tactical and strategic decisions to protect shareholder value and capitalise on opportunities that will arise in the new normal, he said.

Consistent with the performance of the local equities market, PanJam’s securities trading portfolio suffered a loss for the quarter, noting that they were confident, that they have invested in well-managed, well-capitalised organisations that will help to drive the nation’s economic recovery.

PanJam he said was actively managing costs, the benefits of which will primarily occur in the second quarter, as they continue to execute existing major development projects, including the ROK Hotel & Residences.

The first quarter’s highlights are:

 Net profit attributable to shareholders of $5 million (2019: $892 million)

 Return (annualized) on opening equity of 0% (2019: 11%)

 Earnings per stock unit of $0.005 (2019: $0.85)

 Book value per stock unit of $38.26 at March 31, 2020 (December 31, 2019: $40.36)

 Ordinary dividend of $0.275 declared (2019: $0.265)

Commenting on the financial performance of PanJam Investment for the quarter ended March 2020, Chief Executive Officer Facey, noted that net profit was just above flat at $5 million, down 99% compared to last year, with losses on investments and a decline in the share of results of associated companies being the largest contributors.

Addressing the Income Statement, he noted that net profit attributable to owners, for the quarter amounted to $5 million, compared to $892 million for 2019, as earnings per stock unit were recorded at $0.005, down significantly on the $0.85 reported for 2019.

Performance for the quarter was influenced negatively by investment losses of $1,084 million (2019: $94 million of income) and a decrease of $305 million in the share of results of associated companies, offsetting increases of $61 million in property income and $331 million in other income.

Group operating results for the first quarter moved from an operating profit of $190 million in 2019 to an operating loss of $655 million in the current year, as the investment losses and operating expense increases more than offset increased property and other income.

Investment losses arose due to unrealized losses in their portfolio of local and overseas equity holdings, which outweighed higher interest and dividend income and foreign exchange gains.

Property income increased due to high occupancy, contractual rate increases, and devaluation effects on leases denominated in US dollars.

Other income was boosted by gains from the sale of a development property in Kingston.

Operating expenses increased principally as a result of utility costs being driven by consumption levels and rate increases, as well as higher insurance premiums and professional fees.

Finance costs decreased by 15% to $146 million (2019: $171 million) on lower average debt balances and interest rates.

Pre-tax profit of the property segment improved to $494 million (2019: $136 million) while the investment segment reflected losses before tax of $756 million (2019: $731 million profit).

Turing to Associated Companies, he reported that the results consisted principally of their 30.2% investment in Sagicor, where PanJam’s share of earnings decreased by $265 million (31%) to $578 million.

Sagicor and other associated companies first quarter results reflect the impact of the COVID-19 and all are navigating this challenging environment.

PanJam also holds 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”), Outsourcing Management Limited (business process outsourcing), Williams Offices Caribbean Limited (managed office solutions) and Term Finance (consumer lending).

PanJam’s share of the results of associated companies for the quarter decreased by $305 million to $584 million (2019: $889 million).

On the Balance Sheet, he noted that total assets at March 31, 2020, amounted to $56.3 billion, compared to $54.4 billion on December 31, 2019, and stockholders’ equity of $40.5 billion was down 5% relative to the December 31, 2019 balance of $42.7 billion. This equates to a book value per stock unit of $38.26 (December 31, 2019: $40.36).

The Board of Directors of PanJam Investment Limited has taken a decision to suspend its consideration of a second interim dividend until its next meeting, currently scheduled for the third quarter of 2020.