Mayberry optimistic despite COVID-19 losses in Q1

Business

Mayberry optimistic despite COVID-19 losses in Q1

BY BALFORD HENRY
Senior observer reporter
balfordh@jamaicaobserver.com

Wednesday, May 20, 2020

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The Mayberry Group has reported a loss of $1.3 billion for the first quarter of 2020, in spite of a 23.8 per cent increase in fees and commission income to $129.7 million.

The huge loss pales in comparison to a loss of $196.7 million for the first quarter of 2019, but Mayberry's top executives say they remain very optimistic about the future amid the negative impact of the novel coronavirus (COVID-19) panmedic.

According to Mayberry, the loss was attributable to downward price movements on equities and bonds and lower trading gains, partially resulting from the impact of COVID-19 on the local and global financial markets in the first financial quarter of 2020.

The impact consequently resulted in a loss per share (EPS) of $0.81, compared to a loss per share of $0.13 for the Q1 2019.

Total comprehensive loss for Q1 of 2020 amounted to $7.5 billion, compared to a profit of $4.3 billion for the corresponding quarter of 2019, mainly due to a decrease in financial reserves following price reductions for stocks held in the current equity portfolio.

Equity commission was higher by $6.2 million, with increased IPO selling fees of $26.6 million and improved corporate advisory fees of $6 million. In addition, Mayberry Investments Limited's US-dollar portfolio corporate note grew by $2.6 million, and loan processing fees increased by $7.8 million.

Net trading gains of $19.9 million were earned on the equity and bond portfolios, compared to net trading losses of $48 million for Q1 2019.

Net foreign exchange gains of $68.6 million in Q1 2020 increased by $17 million or 33 per cent due mainly to higher spreads, compared to $51.5 million in the corresponding quarter in 2019. Operating expenses for Q1 2020 decreased by $27.6 million, moving from $394.2 million in Q1 2019 to $366.6 million in the current period under review.

According to Mayberry's CEO Gary Peart, the company's capital base continues to be robust and compliant with regulatory benchmarks.

“Our capital-to-risk weighted assets ratio of 16.3 per cent complies with the established minimum of 10 per cent set by the Financial Services Commission [FSC],” he said.

MJE, a 72 per cent-owned subsidiary, continues to invest in key Jamaican stocks. The company purchased 288 million stock units for the first quarter of 2020 and sold 30 million stock units, making MJE a net purchaser of stocks for this period.

“The company will continue to enhance and diversify its portfolio to deliver sustainable growth in the long term. In addition, our tier-one capital is 99 per cent of the overall capital of the company and exceeds the regulatory minimum of 50 per cent established by the FSC,” Peart said.

He said he is extremely thankful to the shareholders, clients, directors, management and staff for their contribution, especially during this pandemic, and urged all to continue to keep safe during this difficult period.

In reference to the overall economic conditions due to the novel coronavirus disease (COVID-19), Peart noted that local and global stock markets have been impacted negatively in the last month of the quarter.

The Jamaica Stock Exchange (JSE) Main Market closed March 2020 at 379,242 points, compared to year-to-date March, 2019 at 388,277 points, a 2.3 per cent decline. In addition, the JSE Junior Market reported similar downward trends and closed March 2020 at 2,304 points, compared to 3,092 points for March 2019 – a 25.4 per cent decline.

“The impact of the pandemic has been felt worldwide, but we are hopeful that the tide will change for the better before 2021,” he stated.


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