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Sagicor Group Jamaica Records 30% Reduction In Net Profit Attributable To Stockholders

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According to Christopher Zacca, President & CEO of Sagicor Group Jamaica, the impact of the coronavirus pandemic (COVID-19) has been unprecedented in their lifetime and has caused them to reevaluate priorities as they navigate the far-reaching humanitarian, social, and economic impacts of the disease.

It was against this backdrop he reported the Group generated reduced net profit attributable to stockholders of $1.88 billion, equivalent to a $0.82 billion or 30% decrease when compared to the prior year.

The earnings per share reduced to $0.48 from $0.69.

Total revenue before unrealized capital losses increased by 15% or $3.05 billion.

The Group’s Insurance businesses reported strong new business and portfolio growth, resulting in net premium income and fee income being 24% and 34% higher than the prior year, respectively.

The core metrics of their Commercial and Investment banking businesses have also remained strong.

However, these strong core results were dampened by the dramatic downturn in the economy, he said, creating the following impact:
• Significant unrealized capital losses driven by the broad decline in bond and equity prices, noting this downturn is temporary and that they anticipate some reversal as the effects of COVID-19 are mitigated;
• Significant unrealized IFRS 9 Expected Credit Losses (ECL) on investment securities and the loan portfolios;
• COVID-19 and the resulting travel restrictions have adversely impacted their investments in hotel operations. Hotel revenue had been on an upward trend until the latter part of the quarter when the effects of travel restrictions were keenly felt. The Group recognized:
i. A significant share of loss from its investment in associate (Playa);
ii. An impairment charge on its Investment in Playa and
iii. An impairment charge relating to the Goodwill that arose on the acquisition of the X-Fund Group in 2018.

Despite these negative effects, the operating cash flow of the company has increased by $4.40 billion and the Group’s cash position has improved by $6.10 billion.

Consolidated net profit attributable to stockholders of $1.88 billion was generated from total revenues (including unrealized capital losses of $6.36 billion) of $16.81 billion. When compared to the corresponding 2019 period, profit attributable to stockholders declined by 30% (an increase of 13% when impairment charges are excluded) and revenue decreased by 16%.

The annualized return on stockholders’ equity was 8% as against 14% for Q1 2019.

Net premium income of $12.85 billion was up 24% in 2019, an increase of 16% when excluding premiums from Advantage General Insurance Company (AGIC), acquired in the Third Quarter of 2019.

Net investment income of $4.49 billion was 16% better than last year.

The Group recorded substantial ECL during the quarter on its portfolios of loans and domestic and international investment securities. The value of equities experienced a sharp decline in the latter part of March 2020.

Fee and other income of $3.90 billion grew by 30% since last year, partly due to strong growth in the Bank’s Payments channels business.

The Group also benefited from realized foreign currency trading gains and unrealized gains from the revaluation of foreign currency denominated assets, net of liabilities.

The Group recognized impairment charges of $1.16 billion, resulting from the lower valuations of investments in hotel operations, a direct result of the uncertainty surrounding the future impact of travel restrictions caused by COVID-19.

Despite the effect of unrealized losses on investment securities, Group assets of $458.46 billion showed only a minor decline from December 2019 and significant growth of 13% over the prior year.

Stockholders’ equity of $87.09 billion as of March 2020 increased by 10% or $7.60 billion over the prior year. There were significant unrealized losses on investment securities being carried at fair value through OCI which contributed to a 5% reduction since December 2019.

Individual Insurance

The Individual Life segment posted net profits of $1.27 billion,112% better than 2019. Net premium income of $6.93 billion was 12% higher than the comparative 2019 period, driven by higher new sales (API) in 2020 for both Jamaica and Cayman resulting in the in-force block of policies growing by 7% to almost 600,000 policies.

There were large unrealized capital losses mainly for the segregated funds and an increase of $0.78 billion in Benefits accrued or paid to policyholders due to withdrawals from Segregated policy funds, primarily driven by a change in the investment stance of clients.

The actuarial liabilities were positively influenced by improvements in morbidity and lapse experience.

Employee Benefits

The Employee Benefits segment produced profits of $1.09 billion, being 13% less than in 2019. Overall new sales were much better than last year as annualized new premium income showed 42% growth over 2019. This segment recorded higher ECL and other unrealized losses on its investment securities portfolio.

Benefits expense of $4.08 billion was 8% more than last year, driven by portfolio growth but mitigated by a marginal improvement in claims ratios.

Commercial Banking

Sagicor Bank contributed net profits of $0.13 billion for the quarter, a sharp reduction when compared to 2019. The results were severely impacted by higher ECL on loans relating to Tourism, Entertainment, and Energy sectors. The fee-based income of $1.06 billion was 12% more than the prior year as our Payments channels continued to grow.

Total assets of $153.43 billion were 20% above the amount in March 2019 and 8% higher than the December 2019 amount. Loans and advances, net of provision for loan losses, were $89.97 billion, 26% higher than the March 2019 balance, and $5.30 billion or 6% ahead of December 2019. Customer deposit liabilities of $119.17 billion were up 25% on last year.

Investment Banking

Sagicor Investments showed strong profitability during the period, contributing $0.53 billion (excluding the share of AGIC earnings) to the Group, 43% higher than the prior year. Fee income was down on Q1 2019 as less corporate financing deals were closed during the review period and the business line recorded large unrealized capital losses on its equity portfolio. However, an improvement in its net investment income along with foreign exchange gains contributed to revenues of $1.49 billion, which is 26% above 2019.
Liquidity and Solvency.

Group consolidated cash generated from operating activities was $10.57 billion compared to $6.16 billion in 2019. The liquidity of the Group remained strong with Cash and Cash Equivalents at the end of March 2020 is $27.44 billion (2019: $21.34 billion). The Group has maintained its strong capital position and continues to exceed regulatory capital requirements across all entities, he reported.

In his outlook, Zacca noted that as global economic conditions may deteriorate further in the coming months, they are carefully monitoring and assessing the overall impact on the Group. Sagicor Group Jamaica, he said, remains cautiously optimistic about the future but feels it prudent to take a conservative view of the potential impact of COVID-19 and manage their businesses accordingly.

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Image Plus Consultants Reporting 43.7% Year Over Year Increase In Revenues, Looks To New Ocho Rios Branch For More Growth

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Dr. Karlene McDonnough Chairman board of directors of Image Plus Consultants limited has released the follow company financial statements for the third quarter ended November 30, 2022.

Balance Sheet Growth

At end of Q3 FY22/23, assets stood at J$651.5M when compared to J$391M for the first nine months of FY21/22. Since audited FY 21/22 results, assets have grown by J$204.1M and liabilities by J$55.7M.

In addition to the new fluoroscopy unit acquired since the start of the financial year, in November 2022 the Company re-located its Ocho Rios operations to a new larger space in White River North Commercial Complex; the company invested in leasehold improvements at the new location to meet service delivery needs.

With almost double the square footage the Ocho Rios branch now has accommodations for increased patient volumes and the new modalities of mammography and magnetic resonance imaging (MRI); both to be offered starting in FY 23/24.

Trade receivables stand at more than double the FY21/22 comparative period figure given the increased volume of business in non-cash related pay or settlements.

Management continues to actively manage these receivables and there has been improvement in the ageing profile. As opportunity allows the Company has optimized cash in hand and made financial investments.

Growth in Revenues & Expenses

At J$802.8M revenues at the end of nine months now exceed revenues for the full FY 21/22 and reflect growth of J$247.9M in revenue since the second quarter. Year over year for the comparative period, there has been a 43.7% increase in revenues.

The rate of revenue growth slowed somewhat since Q2 as a result of the Ocho Rios relocation exercise (all operations at that branch were closed for 4 days whilst CT and X-ray services were down for an additional 7 days when the branch reopened as we awaited relocation of the 3-phase power supply required to operate these units). Management is confident that the move and resulting downtime is an investment that will redound significantly to the benefit of all stakeholders in the months ahead.

Despite this downtime the company’s case count remains very healthy at 40,949 representing YTD an increase of over 17% compared to the comparative period in prior year. The number of cases at nine months represent 88.3% of the full financial year 21/22 case count.

Expenses grew 12.7% over the last financial year driven by higher than normal costs in Q3. In the main these costs were associated with one-off marketing expenditure for the re-printing of all billboards, directional and office signs for the Ocho Rios branch.

Traditionally too, Q3 costs are expected to be a little higher as we have expenditure associated with referring physician appreciation and end of year performance incentives for our team members.

Outlook to Financial Year End

At J$179.7M, the net profit before tax exceeds the full financial year 21/22 performance (PBT after adjustment for directors’ fees paid of J$66.5M was J$179.6M). The outturn is also an increase of 163.9% over the comparative period in the prior year. Performance is anticipated to continue on this path and the directors remain optimistic about the performance outlook given the strategic plans that the team continues to execute.

Prudent management remains a focus so that the company continues to perform even with the potential for economic changes in the short term. The board uses this opportunity to thank our hardworking team for their efforts, referring physicians and their patients for the trust and confidence placed in us and our shareholders for the opportunity to provide an attractive return on their investment.

For more information CLICK HERE

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iCreate Limited Signs Sales Agreement to Acquire Ideas Execution Limited

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iCreate Limited (“iCreate”) is pleased to announce that the Company has signed an Agreement to acquire the shares of Branding & Trade Marketing company, Ideas Execution Limited. The acquisition of Ideas Execution by iCreate fits squarely within its Merger and Acquisition strategy towards building out its vision as a leader within the creative and digital economies in Jamaica and the wider Caribbean region.

iCreate CEO Tyrone Wilson, in announcing the acquisition, expressed his excitement around this deal. “We are continually seeking to build out our Advertising Division and iCreate as a whole as part of our Group M&A strategy. This partnership will see iCreate owning 100% of Ideas Execution and Founder Kevin Frith, becoming a top 10 shareholder in iCreate and a strategic investor”

This acquisition comes on the heels of the Company’s successful closing of Digital Outdoor Billboard Company, Visual Vibe.com Limited.

Founder and principal of Ideas Execution Limited Kevin Frith said the company had a proven track record in maximizing the visibility of major brands and, in response to greater demand as pandemic-related restrictions ease, has increased its capacity to support brand- building projects and business development services
utilizing community bars and wholesale grocery businesses.

Ideas Execution is the leading commercial service provider and business development agency in the route bar market in Jamaica. Ideas Execution, Campari and Wray and Nephew have partnered to execute over 500 branding projects and distributed products valued at over $1 billion in Jamaica since 2013. Ideas Execution has also partnered with a number of clients such as GraceKennedy Group, Seprod and Lucozade to execute over 100 branding projects.

For more information, visit https://www.icreate.group/investors

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Trinidad Based CinemaONE Banking On 2023 Rights Issue To Position Newfound Growth As It Pragmatically Pursues Strategic Opportunities.

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The global cinema exhibition sector and CinemaONE delivered a significant rebound in Financial Year (FY) 2022 as Covid-19 (C19) restrictions waned and moviegoers demonstrated a willingness to return to the Big Screen.

Sony’s Spiderman No Way Home elevated to the highest grossing Spiderman film ever and the 6th highest grossing film of all time with US $1.9B at the global box office. Paramount’s Top Gun: Maverick was another ostensible performer and has become the 11th highest grossing film of all time and the highest earning Tom Cruise movie ever with US $1.5B from the Global Box Office.

CinemaONE similarly enjoyed a resurgence in moviegoing, particularly following the full relaxation of all government imposed C19 Safe Zone operating restrictions on April 4, 2022.

Buttressed by the June releases of major blockbuster titles from multiple studios highlighted by Paramount’s Top Gun: Maverick, Universal’s Jurassic World Dominion and Disney’s Thor – Love and Thunder, CinemaONE continued the positive trajectory highlighted by the Company’s June achievement of its highest single month attendance in the pandemic era which even surpassed its pre-C19 historical 3-year average by a marginal 2% coupled with encouraging per patron metrics.

Financial Performance
I am happy to summarize the following improved financial performance for FY 2022. Gross Revenue increased by 388% to TT $10.1M (FY 2021: TT$2.1M). Gross Profit increased by 486% to TT $5.6M (FY 2021: TT $1.0M) and the Company significantly narrowed the Operating Loss to TT -$.02M, a near breakeven benchmark, versus the previous year’s Operating Loss (FY 2021:TT -$6.5M). Net Loss was similarly constrained to TT -$1.4M (FY 2021: TT -$7.0M).

EBITDA positively rebounded by 315% to TT $3.1M versus the previous year’s negative result (FY 2021: TT $-2.2M). The above results were achieved amidst C19 constraints for the entire first half of FY 2022. Overall, the Company’s box office performance was -38% below the pre C19 historical 3-year average, which aligns with the cinema industry -34% box office deficit to the same pre C19 average as of September 2022.

Future Outlook
The cinema exhibition industry’s recovery from the global C19 pandemic is still underway and is contingent upon the volume and appeal of new film content available, consumer sentiment around movie-going and the continued cessation of government restrictions. The cinema industry is also adjusting to competition from streaming platforms, supply chain constraints, inflationary impacts and other macroeconomic factors.
However, in FY 2022, consumers reinforced their desire to see the newest movie releases in a larger-than-life cinematic environment which continues to propel CinemaONE towards an accelerated recovery.

CinemaONE’ s December 2022 opening of its second cinema site in Gulf City Mall, San Fernando, and its imminent capital markets activity which will infuse additional equity capital into the Company via a Rights Issue will position CinemaONE for newfound growth as it pragmatically pursues strategic opportunities.

Brian Jahra Chairman
December 25, 2022

For more information CLICK HERE

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Sygnus Real Estate Finance To Consider First Dividend Payment In 2023, As J$3.70B 9-Storey One Belmont Commercial Tower Corporate Office Development Over 74% Completed.

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Results of Operations

The Group continued to unlock value from its major real estate investment assets by achieving another set of key milestones, namely:
• advancing the J$3.70 billion Belmont Road 9-storey commercial tower to 74.0% completion and remaining on track for completion in mid-2023, with four of the five floors effectively leased with 10-year renewable agreements;
• advanced the construction of the built-to-suit industrial warehouse facility on Spanish Town Road to 87.0% completion;
• made submissions to various agencies to secure approvals for the beachfront hospitality investment property in Mammee Bay, St. Ann;
• continued to engage in partnership discussions and financing options with international investors and financiers with regards to Sepheus Holdings Limited, the SRF subsidiary which holds the Mammee Bay asset.

Subsequent to the end of the quarter, Sygnus Real Estate Finance Limited (SRF) began exiting its J$1.00 billion investment in a REIN as the third-party project achieved practical completion in October 2022, thus leading to the start of inflows from the sale of units.

SRF completed the purchase of 58 Lady Musgrave Road, Kingston 10, post Q1 Nov 2022, and thus now owns both 56 Lady Musgrave Road and 58 Lady Musgrave Road, which are adjacent to each other.

The Group may be able to consider its first dividend payment during the 2023 calendar year, subsequent to completing its first investment life cycle, after exiting and or completing a number of investments and developments during the course of the year.

The Group remains fully focused on executing its strategy of unlocking value in real estate assets, as it seeks to continue increasing shareholder value.
Total investment income or core revenues was J$21.3 million for 3 Month 2022, compared with a loss of J$4.4 million for the three months ended November 2021 (“3 Month 2021”). This result was primarily driven by higher net interest income from a larger portfolio of REINs, which offset larger interest expense driven by an increase in loans and borrowings and notes payable.

The weighted average fair value yield on REINs was 11.2% compared with 10.l% last year, while the weighted average cost of debt was 5.1% compared with 5.0% last year. Subsequent to the end of the quarter, SRF began exiting its J$1.0 billion investment in a REIN which achieved practical completion in October 2022, as the Group began to receive the sale proceeds for purchased units as buyers completed the financing for their purchases.

In addition to the interest charged by the REIN, SRF also receives a profit-sharing component.

There was no gain on investment property during the quarter as these assets are only valued once at the end of each financial year, with the last valuations occurring in August 2022.

Share of gain on joint ventures, which also captures SRF’s 70% ownership of the One Belmont development was immaterial during the quarter, as this development is only valued at the end of each financial year, with the last valuation occurring in August 2022.

Note, however, that One Belmont is scheduled to reach practical completion prior to the end of the current financial year, and as such, the revaluation of share of profit is likely to occur prior to the August 2023 year-end financial results. This revaluation may materially impact total investment income during the quarter in which it occurs. Note also, given One Belmont has already negotiated long term leases with tenants, to the extent where lease payments begin while SRF still maintains its share of the joint venture or a portion thereof, these lease flows may affect total investment income starting in the quarter during which this occurs.

SRF’s total investment income is typically comprised of all the activities that were involved in the unlocking of value from its portfolio of real estate investment assets, namely: interest income on its REINs and the commitment fees related to this activity; gain or loss on its property investments, namely, on its investment properties, or on any real estate assets that were exited; and share of gain or loss on its joint venture investments.

Based on the nature of its business model, SRF’s earnings during interim reporting quarters may experience “lumpiness” in total investment income and net profits, which is typically “smoothed out” at the end of each financial year, similar to what occurred in FYE Aug 2022 relative to the interim quarterly results.

The Group uses independent appraisers to value its investment assets annually. All investment properties are USD investment assets which are converted to JMD for financial reporting purposes. SRF’s key strategic assets are held via wholly owned subsidiaries or joint ventures.

Net investment income or core earnings was a loss of J$82.4 million vs a loss of J$87.4 million for 3 Month 2021, driven by the J$21.3 million outturn for total investment income which was offset by higher operating expenses of J$103.7 million versus J$83.0 million last year. For FYE August 2022 SRF generated J$983.6 million in net investment income.

Net loss attributable to shareholders was J$172.5 million compared with a net loss of J$99.9 million last year, driven by the negative net investment income of J$82.4 million, a fair value loss on financial instruments of J$23.4 million (3 Month 2021: gain of J$10.9 million) and a net foreign exchange loss of J$66.7 million (3 Month 2021: loss of J$23.5 million). Note that SRF’s net profit may be materially impacted by the completion of the One Belmont development and by the final net proceeds from exiting investments in REINs, which are scheduled to occur prior to the end of the current financial year.

At the end of the current financial year, SRF’s net profit may also be materially impacted by changes in the valuation of its underlying real estate investment assets, as valuation for existing assets only occur once at the end of each financial year. Book value per share for Q1 Nov 2022 increased to J$22.71 compared with J$20.81 last year.

Note: the Group’s return on average equity (ROE) was 11.3% at FYE Aug 2022 with an average ROE of 30.6% over the past three audited financial years. For FYE August 2022, SRF generated J$693.0 million in net profit.

Basic earnings per share (EPS) was negative J$0.53 compared with negative J$0.36 last year, while diluted EPS was negative J$0.49 compared with negative J$0.30 last year. Similarly, basic core earnings or net investment income per share (NIIPS) negative J$0.25 compared with negative J$0.31 last year, while diluted NIIPS was negative J$0.24 compared with negative J$0.27 last year. For FYE August 2022, SRF generated basic and diluted earnings per share of J$2.20 and J$2.06 respectively.


One Belmont | Commercial Tower: The J$3.70 billion 9-storey corporate office development is currently 74% completed, with construction remaining on track for the target April/May 2023 completion date. The substructure is 100% completed with pouring of concrete for all floors completed and the roof remaining to be poured. A fourth long-term agreement-to-lease which should have been executed in December 2022 was rescheduled for execution in January 2023. This means that four of the five floors are effectively leased once this fourth agreement is completed. The intended tenants have begun the process to select and execute their respective interior designs to meet their respective needs.

 

 

For more information on Sygnus Real Estate Finance Limited
Unaudited Results for the 3 Months Ended November 30, 2022 CLICK HERE

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Mayberry Jamaican Equities Reporting Supreme Ventures, GraceKennedy, Jamaica Broilers, Lasco Distributors and Lumber Depot As Largest Contributors To Portfolio’s Dividend Revenues For Year

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Business Objective
Mayberry Jamaican Equities Limited (MJE) is an investment Company whose objective is to achieve long term capital appreciation, while preserving capital, by investing in public equity securities in Jamaica (“Jamaican equities”). The Company employs a value – based approach to identifying and investing in high quality public businesses.

This approach is designed to compound book value per share over the long term. While the Company will seek attractive risk-adjusted returns, it will at all times seek downside protection and attempt to minimize loss of capital.

Performance Overview
The year was marked by high inflation, global conflicts and the tightening of monetary policies which resulted in increases in interest rates and a challenging financial landscape both locally and globally. Q4 2022 market conditions reflected continued moderate improvements and the local financial environment remained resilient compared to global counterparts.

For the year ended December 31, 2022, MJE reported profits of J$5.1 billion representing an increase of J$2.6 billion or 104% over the corresponding period in 2021. The pull back in the local equities market beginning in the third quarter of 2022 adversely impacted MJE’s half year results but several strategic stocks in the portfolio rebounded in the fourth quarter buttressing the full year’s solid performance with net unrealised gains on investments in associates increasing by J$2.7B or 105% to J$5.2 billion. This was complemented by dividend income increasing by 41% or J$160M to J$549
million. Full year earnings per share (EPS) was J$4.21 (2021: (EPS) J$2.06).

For the three months to December 31, 2022, the Company recorded a decline in net profits of J$921 million or 50% to J$911 million when compared to the J$1.8 billion earned in the similar quarter last year. This reduction is due primarily to the more significant uplift in the market and stock prices in 2021 arising from the recovery from the COVID-19 pandemic in 2020. Total operating expenses for the quarter ended December 31, 2022 increased by J$49 million to J$235 million when compared to the comparative period in the prior year. This resulted in earnings per share (EPS) of J$0.76 (2021: (EPS) J$1.52).

Total Comprehensive Income
MJE reported total comprehensive income of J$4.8 billion for the year ended December 31, 2022 representing an increase of 53% or J$1.7 billion due to solid overall performances on the managed Jamaican equities portfolio. The Company recorded total comprehensive income of J$891 million for the three-month period October to December 2022. This compares to a total comprehensive income of J$1.4 billion for the similar quarter in 2021.

The decrease noted was primarily attributable to unfavourable price movements on securities in the portfolio for the December 2022 quarter which can be attributable to increases in interest rates in the economy and a number of fixed income instruments coming to the market.

Total Revenues
Net revenues generated for the year ended December 31, 2022 increased by 99% or J$2.8 billion to J$5.5 billion attributed primarily to the significant appreciation in the market value of investments in associates.

For the quarter ended December 31, 2022, net revenues amounted to J$1.1 billion compared to net revenues of J$2 billion for the similar quarter in 2021.

This performance was primarily attributable to reduced unrealized gains on investments in associates of J$827 million. For the year ended December 31, 2022, dividend income grew by J$160M or 41% to J$549 million when compared to J$389 million for the 2021 comparative period. Dividend income of J$95.8 million was recorded in the quarter representing a marginal decline of 1.3% compared to J$97 million for the October to December 2021 quarter.

The largest contributors to the portfolio’s dividend revenues for the quarter were Supreme Ventures Limited, Jamaica Broilers Group Limited and General Accident Insurance Company Jamaica Limited with dividends of approximately J$83 million. For the year ended December 31, 2022, the major contributors to dividend revenues were Supreme Ventures Limited, GraceKennedy Limited, Jamaica Broilers Group Limited, Lasco Distributors Limited and Lumber Depot Limited.

Operating Expenses
Total operating expenses of J$492 million for the year ended December 31, 2022 increased by J$185 million or 61% over the corresponding 2021 period driven mainly by increased expenses incurred for management and incentive fees following the significant growth in the net asset value under management.

Total operating expenses for the Q4 2022 increased by J$49 million when compared to Q4 2021. This was mainly attributable to higher expenditure for broker fees, legal and professional fees and incentive fees. This was partially offset by reduced expenses for computer licensing fees and software impairment.

For more information click this link: Mayberry Jamaican Equities Limited (MJE) Unaudited Financial Results For The Twelve Months Ended December 31, 2022

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