The winners, in-betweeners, losers

There have been mixed results so far on the December quarterly out-turn by listed companies on the Jamaica Stock Exchange. Fourth quarter results are well underway for these entities and the results have been mixed.

Despite the challenges, the manufacturing and distribution sector has remained resilient with both junior and main market companies in the grouping all recording improved year-over-year net profit performances for the fourth quarter.

Some companies are benefiting from changes in consumer behaviour and business model shifts, necessitated by the novel coronavirus pandemic, causing them to pivot to even non-traditional areas of business. One of the listed companies benefiting from the changes in consumer behaviour and business model shifts is courier and online service provider, Mailpac, while the converse is happening to university real estate development and residential company, 138 Student Living (138SL), where the impact of the novel coronavirus pandemic is weighing heavily on its performance.


For Mailpac, the pandemic brought a greater awareness and appreciation for online shopping and its convenience, cost savings and variety in choices. This has contributed to a significant increase in volume and hence revenue of over 41.5 per cent for the December quarter, which was tempered by higher costs to offset the lack of capacity in the traditional air lift channels to manage the large volume increase.

For 2021, a further pickup in economic activity is expected as the vaccine is distributed and business confidence returns, which should support a gradual recovery in corporate earnings.

In the case of 138SL, online classes have become the main mode of instructional delivery at The University of the West Indies as the pandemic has restricted in-person classes. This has and continues to result in lost revenues for 138SL, as many students have left campus boarding facilities and returned home.

However, for the entities within the financial sector, main market industries and materials sector, there was a divergence in the reported earnings.

An assessment done by NCB Capital Markets shows that, “While 2021 is likely to continue to produce a few standouts, broad-based recovery in these sectors is likely to move in tandem with the recovery in economic and business activities.”

That being said, the resurgence in COVID-19 cases and the re-tightening of restrictions are the main risks to a recovery in corporate earnings in 2021, particularly in the first half of the year. For the main market financial companies that have reported thus far, softer earnings continued to be the main theme for the fourth quarter.

Companies in this group included JMMB Group Limited (JMMBGL) and Sygnus Credit Investments, whose net profit declined by 21.6 per cent and 58.1 per cent, respectively. In the junior market financial sector, SSL Venture Capital Jamaica reported a decline in net profit of 55.0 per cent, attributable to the pandemic’s impact on the distribution segment.


General Accident Insurance Company’s net profit declined by 65.4 per cent as a result of higher commission and claims expenses, as well as lower commission and investment income. In contrast, Barita Investments grew its net profit, substantially, by over 100 per cent, buoyed by increases in non-interest income, net interest income and gains on investment activity.

ISP Financial Services was also able to achieve a 15.3 per cent increase in net profit in the fourth quarter, driven by increases in operating efficiencies and productivity from new work-from-home systems. Much like many businesses in the real estate sector, locally and globally, Eppley Caribbean Property Fund Limited (CPFV) and 138SL reported weaker earnings given the downturn in activity across key sectors such as retail and tourism and the move to remote work and learning weighed heavily on the demand for real estate.

Consequently, CPFV and 138SL saw year-over-year contractions in net profit with both reporting declines of 20.5 per cent and 63.9 per cent, respectively. Rent relief measures given to tenants who continued to be affected by depressed conditions in the global travel industry, adversely affected the performance of CPFV’s properties in Barbados.

There has been a gradual improvement in the performance of the main market in the industrial and materials sector as both TransJamaican Highway Limited (TJH) and Wigton Windfarm saw quarter-over-quarter improvement in their performances. However, on a year-over-year basis TJH’s earnings declined, while Wigton reported robust growth in net profit.

Under less restrictive containment measures TJH experienced gradual recovery in traffic flow as well as its top and bottom line. During the height of the pandemic (June quarter) TJH realised a 34.5 per cent and 35.7 per cent year-over-year decline in traffic and revenues, respectively.

However, consistent with the lifting of restrictions, there was a steady recovery in TJH’s performance, such that traffic was down just 10.2 per cent and revenues 9.1 per cent, while the company made a profit of US$1.21 million in Q4. However, the company still has significant ground to recover as the school closures, still depressed economic environment and remaining restrictions will keep earnings below pre-pandemic levels.

On the other hand, Wigton Windfarm saw robust net profit growth, an improved performance reflective of plant availability and favourable wind speed, relative to lower 2019 fourth quarter production, resulting from a decline in wind speed.


The manufacturing and distribution companies that have reported earnings, so far, continued to perform well despite the downward pressures on the economy. However, while two companies saw robust demand, others achieved bottom line growth through cost control and growth in other income.

Cigarette distributor, Carreras, reported a 46.6 per cent increase in net profit for the December quarter as lower year-on-year revenues were balanced out by a decline in interest and admin expenses. Aided by an increase in economic activity, witnessed in the historically peak December quarter, the junior market’s manufacturing and distribution companies, Mailpac and Fontana, saw strong growth in earnings.

Fontana and Mailpac saw improved net profit performance of 27.7 per cent and 20.3 per cent, respectively. Fontana was able to increase revenue from products in the health department, despite reduced revenue in higher margin products. Operating profit also increased as a result of successful cost control measures.

NCB Capital Markets assessed that “the manufacturing and distribution sector should continue to be resilient supported by changes in consumer preferences and spending. The financial sector should benefit from the recovery in capital market activity, although deterioration in asset quality from key sectors could present headwinds.”