JSE Sees More Revenues, but Earnings Decline in Q2
- Despite solid growth in revenues for the quarter ended June 2025 (Q2 2025), the Jamaica Stock Exchange Group’s (JSE) earnings fell sharply (40.9%) to $45.28Mn, year-over-year, due to elevated costs.
- Revenues for the quarter reached $658.55Mn, reflecting a 14.9% increase compared to Q2 2024. Top-line growth was broad-based, with fee income rising by 13.5% and cess increasing by 20.7%, representing the primary contributors to the overall uplift.
- However, growth in operating expenses outpaced topline growth. Operating expenses rose (34.1%) to $607.85Mn for the same period in 2024. A significant net impairment loss on financial assets (+867%), increased staff costs (+14%) reflecting inflationary pressures and the onboarding of new personnel, higher property expenses (+37.8%), and additional operating costs (+86.3%) associated with expanded activities aimed at stimulating growth were the main contributors to the elevated costs.
- Consequently, despite the improvement in revenues during the quarter, earnings plunged to $45.53Mn from $76.99Mn.
- However, despite a challenging quarter, JSE reported a 66.2% increase in earnings to $112.20Mn for the six-month ended June 2025 (H1 2025). The H1 2025 outturn was underpinned by a strong first-quarter performance (+155.5%), which more than offset the decline in Q2 2025.
- That said, elevated interest rates have suppressed market activity over the past two years. However, with price pressures dissipating, interest rates could trend downward, allowing for an uptick in market activity and a potential increase in listings is anticipated. In this scenario, JSE stands to benefit directly from higher fee income and cess, which would ultimately support earnings growth.
- JSE’s stock price has decreased by 1.8% since the start of the calendar year. The stock closed Wednesday’s trading session at $12.95 and currently trades at a P/E of 14.9x above the Main Market Financial Sector Average 13.6x.
(Sources: JSE & NCBCM Research)