- Barita Investments Limited (Barita) reported a net profit of $1.18Bn for the six-month period ending March 2025, marking a 38.1% decline compared to the same period last year. This drop in profitability was largely driven by a weaker net operating income.
- Impacted by a 51.4% ($1.32Bn) reduction in gains from investment activities, mainly due to the underperformance of its real estate exposures, which were adversely affected by the depreciation of the Jamaican dollar, net operating income (NOI) fell 27.7%. The falloff in NOI occurred despite a 33.4% increase in Net Interest Income.
- Gains from its private equity holdings partially offset the underperformance of its real estate portfolio. However, Fees and Commissions Income declined by 9.0%, primarily reflecting lower asset management fee income.
- Non-interest expenses for the six-month period ending March 31, 2025, declined by 15.5% to $1.97Bn aided by reductions in both administration expenses and staff costs. Administration expenses fell by 18.4% to $1.31Bn, driven by the reclassification of costs related to the core system replacement project to intangible assets. This adjustment stemmed from significant changes in the project’s implementation approach, which influenced the appropriate accounting treatment. Additionally, the 14.0% reduction in staff costs was largely the result of a restructuring exercise undertaken in the prior year.
- Notwithstanding the underperformance of its real estate exposures, and the expectation that the performance of its broader alternative investment (AI) portfolio to taper, management still expects to continue earning from its AI portfolio. Notably, Barita recently disclosed plans to develop a warehouse and mixed-use complex over the next 18 to 24 months via its wholly owned subsidiary, MJR Real Estate Holdings. This initiative aligns with the company’s strategic focus on broadening its portfolio, aimed at enhancing long-term returns and portfolio diversification.
- Barita’s stock price has declined by 3.3% year-to-date, closing at $71.10 as of Monday. At this price, the stock is trading at a price-to-book (P/B) ratio of 2.4x, which is notably higher than the Main Market Financial Sector’s average of 1.2x.
(Source: JSE & NCBCM Research)