Eppley Limited produced earnings per share of $0.56 in the first half of 2020, a 17 per cent return for shareholders so far this year.
Profit after tax was $107 million in the first half of 2020, 38 per cent above the $77 million earned in first half of last year.
Company chairman, PB Scott, said Eppley grew profit significantly despite a reduction in interest income caused by the termination of a few large factoring arrangements recorded in 2019 that expired this year.
Profitability growth was driven primarily by the expansion of asset management business.
At the end of the quarter, net asset value was $4.43 per share.
The company as at end of June owned a $3.8 billion investment portfolio consisting of cash, loans, leases, receivables and investments in our mezzanine, real estate, infrastructure and asset management joint ventures and subsidiaries. The average income yield on portfolio was 12 per cent.
The company also managed the equivalent of approximately US$75 million of capital for investors at the end of the second quarter mainly through the Eppley Caribbean Property Fund and the Caribbean Mezzanine Fund.
Company leverage ratio was 3.4 times capital at the end of the quarter and the average cost of debt was six per cent.
Eppley ended the quarter with $417 million of cash.
Asset management fees and the dividends received from subsidiaries and affiliates are reflected in the company’s financial statements as other operating income.
These income streams, directors stated in remarks attached to the period’s results, are stable and recurring and enhance the quality of Eppley’s earnings and the resiliency of the business.
This week, the Board of Directors approved a dividend of 3.72 cents per share payable on September 15 to ordinary shareholders on record as of August 31.
“Subject to the discretion of the Board of Directors, we expect to maintain our dividend policy in future periods,” Scott stated.
In closing, he stated, “Eppley remains well capitalised. Our proprietary portfolio is diversified, carefully underwritten and continues to perform.
Our asset management business adds earnings largely insulated from credit or market risks. Nevertheless, we remain vigilant.”