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Higher expenses of 138% hit First Rock’s 2020 profitability

Real estate and private equity company First Rock saw its 2020 profitability hit by higher expenses, which went up by a whopping 138 per cent, and foreign exchange losses.

In spite of this the company managed to eke out a net profit of US$3.68 million for 2020, up from the US$756, 734 posted in 2019. Net profit for the December quarter amounted to US$1.30 million, up from the 2019 posting of US$472, 596.

Shareholders’ profit for 2020 amounted to US$3.69 million coming from US$756, 354 in 2019. Profit attributable to shareholders for the December quarter was US$1.30 million compared with the US$472, 596 posted in 2019.

Administrative and general expenses closed the year at US$2.82 million coming from the 2019 posting of US$1.18 million, a 138 per cent increase.

BIG GROWTH IN INVESTMENT INCOME

For the twelve months ended December 31, 2020, First Rock grew its investment income by more than 250 per cent to US$7.44 million coming from US$2.06 million in 2019. The breakdown of the investment income is as follows:

• Rental income amounted to US$412, 177 (2019: US$80, 195).

• Realised and unrealised gains on investments totalled US$5.50 million versus US$1.22 million reported in 2019.

• Interest income closed at US$1.54 million (2019: US$326, 802) for the period under review.

• Dividend income amounted to US$25,541 (2019: nil)

• Loss on foreign exchange amounted to US$432,440 versus a gain of US$420, 954 booked in 2019.

• Gain on acquisition of subsidiary totalled US$188, 843 (2019: nil).

• Other income for the twelve months amounted to US$204, 249 (2019: US$16, 600).

As for the December quarter, First Rock booked total investment income of US$2.64 million compared to US$1.07 million recorded for the corresponding period in 2019.

Total operating expenses amounted to US$3.74 million coming from US$1.31 million in 2018, of which the biggest jump of 138 per cent came from administrative and general expenses. Depreciation grew to US$103, 990 coming from US$1, 329 in 2019, while preference dividend amounted to US$602, 068 coming from US$121, 765 in 2019.

Allowance for credit losses was up, to close at US$213, 386, while no allowance was booked for 2019.

Investments went up more than 300 per cent, while for the fourth quarter, total operating expenses closed at US$1.33 million coming from US$602, 104 in 2019. Total comprehensive income for 2020 amounted to US$3.67 million, up from the 2019 amount of US$711, 845, representing a more than 300 per cent growth.

Total comprehensive income for the December quarter closed at US$1.33 million, coming from $421, 485 for the corresponding period in 2019. As at December 31, 2020, total assets closed at US$36.94 million (2019: US$16.17 million).

This increase is primarily due to the value of ‘investment property’ which amounted to US$19.77 million (2019: US$9.68 million). Investment securities also contributed to the increase, which closed at US$9.13 million (2019: US$4.34 million) as at December 31, 2020.