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JMMB reports 30% decline in first-quarter profits due to COVID-19

JMMB is reporting that for the first quarter of this financial year it has recorded unaudited after tax net profits of $780 million a 30 per cent decline when compared to the similar period last year.

JMMB reported net profit of $780 million, down 30 per cent for the corresponding quarter last yesar.

However, the company explained that the decline was largely attributed to the slowdown of economic activities brought on by the novel coronavirus pandemic.

The group said the pandemic’s impact on performance, due to overall shrinkage in the local economic environment over the period April to June, consequently impacted the company’s gains on securities trading and foreign exchange earnings, which were $1.3 billion and $527.8 million, respectively, representing a corresponding decline of 40 and 29 per cent.

“We remain hopeful and confident in the sustainability of the group and expect to continue seeing realised value…”

– JMMB Group’s Chief Executive Officer Keith Duncan

JMMB Group Chief Financial Officer Patrick Ellis said that regardless of the fallout and current uncertainty, the company’s financial performance remains stable.

“Even as we saw a dip in our profit, core earnings remain positive and expenses managed in line with the prevailing market conditions,” Ellis said.

The share of profit from Sagicor Financial Corporation Limited (SFC) was also adversely impacted by the pandemic, which resulted in the financial conglomerate having share of losses totalling $8.9 million for the quarter.

JMMB Group’s Chief Executive Officer Keith Duncan

“This was primarily related to higher than expected credit losses (ECLs), as well as an internal reinsurance transaction that resulted in a strengthening of the reserves. Having announced the acquisition of 22.5 per cent of SFC, in December 2019, the group remains positive about its investment in SFC; expecting improved financial performance from SFC over the short term,” a company release noted.

JMMB Group’s Chief Executive Officer Keith Duncan noted that the core earnings of SFC remain viable and are expected to materially contribute to shareholders’ value in a positive manner, even as they add diversification and the opportunity for the group’s future growth as a market leader in the Caribbean’s insurance, pension, and asset management sectors.

He also said despite the challenges and the uncertainty of the pandemic, he expects to see improved performance and tempered growth in the economy as Jamaica and the region adjust to the new normal.

“This will augur well for the company and its growth prospects and profitability,” Duncan stated.

For the period, the regional financial entity also saw a 14 per cent year-on-year decline of revenues which totalled $5.0 billion for the period. At the end of the period, the group’s asset base stood at $431.8 billion, up $31.57 billion or eight per cent relative to the start of the financial year. This increase is attributable to a larger loan and investment portfolio. Earnings per share for the three-month period was $0.39.

Sharing the group’s strategic outlook, Duncan said it has the financial foundation to withstand this new economic reality, and will remain focused on its plan which will see it continually reassessing and reimagining new opportunities to expand and grow revenues and diversify income streams.

“We remain hopeful and confident in the sustainability of the group and expect to continue seeing realised value for all our shareholders, clients and team members, as we explore accretive business development opportunities to grow our return on equity and expand our footprint,” he said.