Real Estate

The Sagicor Jamaica Building in New Kingston (File photo)

Sagicor X Fund Limited considers new business lines

The Sagicor Jamaica Building in New Kingston (File photo)

Following Sagicor X Fund Limited’s disposal of 20 million ordinary shares in Playa this year — through its subsidiary Jamziv Mobay Jamaica Portfolio Limited (Jamziv) — the company’s directors outlined that the proceeds from the sale will be redeployed into investment opportunities with a projected positive outcome. 

In early January 2021, Jamziv Mobay Jamaica Portfolio Limited (Jamziv) disposed of the Playa ordinary shares and received an inflow of US$96 million. 

(Photo: Playa Group)

In remarks attached to the results for the year ended December 31, 2020, directors noted, “The group had positioned itself to capitalise on the earnings potential of the tourism sector in the medium to long term. However, this strategic move was disrupted by the pandemic.”

Tourism takes a hit

The outbreak of COVID-19 globally triggered a sharp decline in tourist arrivals and the demand for leisure activities. 

As a result, business activities across Jewel Grande Montego Bay (JGM) and Playa Hotels & Resorts NV (Playa) halted during the earlier part of the year while DoubleTree by Hilton (DTO) continued operations but at reduced occupancy levels. 

Jewel Grande Mobay (Photo:

The directors said COVID-19 has negatively impacted earnings for the tourism sector, which led to the recording of an impairment charge of JM$7.93 billion on investments in associated company Playa.

 Effective September 22nd, 2020, the group sold its interest in JGM to Sagicor Pooled Investment Fund Limited (PIF). 

The transaction improved X-Fund’s liquidity profile and generated inflows of $1.6 billion, which the company used to pay out maturing debt.

Financial performance during 2020

Directors outlined that the sale price was consistent the current valuation, but amid the COVID-19 pandemic, property values declined significantly over the prior year, resulting in a loss on disposal of JM$0.38 billion. 

I addition,They said that the company has adjusted its business model to outmanoeuvre the effects of COVID-19. 

Sagicor Real Estate X Fund Limited (X Fund), for the year under review, generated net loss attributable to stockholders of JM$9.99 billion compared to $0.038 billion in the prior year.

Total revenue reduced by 59 per cent or JM$3.72 billion, to JM$2.58 billion, when compared to the same period last year. 

Direct hotel operations segment, which comprised DTO and JGM, contributed JM$2.65 billion, 57 per cent below the prior year. 

Hotel expenses of JM$2.39 billion for the year represent a 46 per cent reduction over the comparative period. 

Directors noted that DTO had performed reasonably well in 2020 considering the impact of COVID-19. The company continues to outperform comparable properties in the Orlando market with occupancy levels of 47 per cent for the full year 2020. 

Hotel revenues for DTO were $2.43 billion (2019: $5.27 billion), with EBITDA of $0.34 billion (2019: $1.47 billion), and net loss for the period of $0.62 billion (2019: profit of $0.28 billion). The reduction compared to last year is as a result of a significant decline in occupancy levels. 

The Group’s total assets were $32.00 billion at December 2020 and $49.22 billion at December 2019. 

Stockholders’ Equity as at December 2020 was $15.17 billion, down 41 per cent from $25.54 billion as at December 2019.