Barita Investments Limited (BIL) reported an improved first quarter performance.The company recorded profit of $32.2Mn (EPS: $0.07) compared to a net loss of $13Mn (EPS: -$0.03) in the same quarter last year.
The reduction in market interest rates has allowed for a reduction in Barita’s interest cost and a 100% increase in net interest income to $107.8Mn. Growth in net profit was also supported by $11.6Mn in trading gains.
The company has also managed to show cost containment by cutting operating expenses 5.3% to $84.9Mn. Going forward, with little scope for further rate cuts, it may prove challenging to continue growing net interest income, which accounts for 84% of total revenues. Therefore, gains from trading activities and fee income will need to remain buoyant to bolster earnings growth.