High revaluation gains on investment property led to Stanley Motta Limited ending 2020 with a large gain in net profit of JM$832.75 million compared to JM$281.29 million as at December 31, 2019.
The 196 per cent increase in net profit was due to revaluation gains of JM$624.5 million on the investment at year end 2020.
Stanley Motta’s overall investment property increased in value from J$4.8 billion as at December 2019 to J$5.5 billion.
Earnings per share — which is calculated as profit after tax divided by weighted average number of shares — was JM$1.1 for the twelve-month period ending December 2020 compared to 37 cents over the corresponding period of the previous year.
Stanley Motta’s named its property 58 HWT for its location on Half-Way-Tree Road in St Andrew, Jamaica. As outlined on its website, it is a campus-style business process outsourcing and technology park consisting of five commercial office buildings, surrounding a central Georgian-style great house, totalling over 200,000 square feet located around.
Unit 1 is the largest structure on the Campus and is located on the property’s northern border parallel to Richmond Avenue.The recently constructed five-storey building comprises over 112,500 square feet of rentable commercial office space. Unit 1’s tenant took posssession of the building as a cold hard shell in April 2018 and is currently finishing its interior.
Units 2 and 3 are in the southeastern corner of the property bordering the Marriott Courtyard and National Housing Trust respectively. Unit 2 is a recently renovated two-storey building consisting of over 41,500 rentable square feet of commercial office space.
Unit 3 is also recently-renovated and adjoins Unit 1 but is a smaller single-storey structure consisting of 8,300 rentable square feet of commercial office space.
Units 1, 2 and 3 are all currently in use in the business process outsourcing industry. Collectively, these buildings have the capacity to house [3,300] call centre seats and [5,000] employees.
Unit 4 is a recently-renovated two-storey structure consisting of over 8,266 rentable square feet located in the south-eastern corner of the property bordering on Ligunea Club.
The building is currently occupied by two technology firms and also houses the offices of the management company.
Units 1, 2, 3 and 4 are all owned directly by Stanley Motta.
Unit 5 is commonly known as the General Accident building. It is an over 29,706 square foot two-storey building located directly on Half Way Tree Road on the south-western corner of the property. Its tenants are engaged in the insurance, financial services, and medical industries.
Unit 5 is owned by Unity Capital, a wholly-owned subsidiary of Stanley Motta.
Revenue for the twelve-month period saw an increase 9.6 per cent over the JM$419.9 million in the previous year to J$460.2 million.
For the fourth quarter ended December 31, 2020, revenue of JM$117 million represented a 9.3 per cent increase over JM$107.1 million recorded for the same period of the prior year.
Management, in remarks attached to the results, said the increases were mainly attributable to the depreciation of the Jamaican dollar, which moved from an average of J$134.13:US$1 as at 31st December 2019 to J$144.41:US$1 on 31st December 2020.
Administrative expenses for the full year increased by 45.3 per cent over prior year, moving from JM$142.8 million to JM$207.5 million.
Similarly, there was a 160 per cent increase for the quarter ended December 31, 2020, when compared to that of 2019, moving from JM$17.2 million to JM$44.7 million.
Management said increases are due to a significant FX loss of J$56.7 million arising from the revaluation of the DBJ loan.
December 2019, in comparison, realised a FX Gain of JM$20.4 million whereas December 2020 realised a FX Loss of JM$7.9 million.
“Revenue for 2021 is expected to remain stable excluding significant fluctuations in the foreign exchange and property revaluations”— Melanie Subratie, chairman, Stanley Motta Limited
Other expenses contributing to the year over year increases are SEZ fees, repairs & maintenance and additional requirements based on the company’s response to COVID 19, management outlined.
Net Operating Income (NOI) declined year over year, moving from J$277.1 million for December 2019 to J$258.1 million for the period ended December 31, 2020, a 6.9 per cent decrease.
This is due to the YTD impact of the FX loss.
Management said that, without this loss, the company would have realized NOI of approx. J$314.7 million for the twelve-month period ended December 31, 2020.
Funds from Operations (FFO) of J$217.4 million was generated YTD December 2020 compared to that of J$234.2 million generated for December 2019, a 7.1 per cent decrease.
Net profit margin for the Quarter ending December 31, 2020 stands at 585 per cent and YTD, 181 per cent as a result of the Revaluation Gains.
Without these gains, the Net Profit Margin for the Quarter, December 2020 would have been at 52 per cent and YTD, 45 per cent .
Stanley Motta Chairman Melanie Subratie commented, “This demonstrates the company’s commitment to maintaining strong operational efficiency, while continuing the collection of rent in a timely manner.”
Subratie stated, “Revenue for 2021 is expected to remain stable excluding significant fluctuations in the foreign exchange and property revaluations.
“The collection of rent in US dollars is expected to continue on a timely basis.”