Aug 2007 Financial News

JMMB Releases First Quarter Results

Aug 16, 2007

Results for the First Quarter Ended June 30, 2007
All figures quoted in Jamaica Dollars unless otherwise stated

Jamaica Money Market Brokers Limited (JMMB), for the First Quarter Ended June 30, 2007, reported Earnings Per Share (EPS) of 16 cents, down 6 cents or 27.27 per cent on the same period in FY07.

Net Interest Income for Q108 totalled $357.51 million, up 11.52 per cent or $36.94 million on the corresponding period in FY07. This was as a result of the increase in Interest Income by 8.40 per cent or $166.77 million to $2.15 billion while Interest Expense rose by a smaller margin of 7.80 per cent or $129.83 million to $1.80 billion.

Q108 on Q107, Net Gains on Securities Trading was down 17.72 per cent or $55.16 million to $256.09 million. Conversely, Fees and Commissions and Foreign Exchange Margins from Cambio Trading saw outstanding increases of 23.83 per cent or $6.92 million to $35.96 million and 29.26 per cent or $4.91 million to $21.67 million respectively. Thus, Operating Revenue net of Interest Expense fell a minimal 0.94 per cent or $6.39 million to $671.23 million. According to the Directors, the flat results in Operating Revenue resulted from less robust trading activities when compared to the previous year.

For the period under review, Share of Profits of Associated Companies stood at $26.50 million, a substantial decline of 58.83 per cent or $37.87 million on the same figure in FY07. Other Income was down 47.93 per cent or $1.05 million to $1.14 million. Administrative Expenses, however, increased 13.51 per cent or $51.67 million to $434.23 million due mainly to higher salary costs as a result of additional staff to cope with future expansion coupled with general salary and inflationary related increases granted at the start of the financial year.

Ultimately, Profit Before Taxation fell a significant 26.82 per cent or $96.99 million from $361.63 million in Q107 to $264.65 million in Q108. The Effective Tax Rate for the period under review was 12.65 per cent compared to a Tax Rate of 10.57 per cent in Q107. As such, Profit After Taxation amounted to $231.18 million compared to $323.41 million on the comparable period in FY07 – a considerable decline of 28.52 per cent or $92.22 million.

The Directors have stated that these results are in line with their expectation. The shares of JMMB last closed at a price of TT$0.94 on the local market. At the current price and our forecasted EPS for FY08 of TT$0.08 (JMD0.84), these shares are trading at a P/E multiple of 11.75 times. At this time, we continue to recommend a SELL on this share.

Nancy Chen
WISE Equity Research Team