JMMB’s earnings hit by high inflationary environment Loop Jamaica

Black Immigrant Daily News

The JMMB Group says all its business lines have been adversely impacted by the prevailing high inflationary and high-interest rate environment.

Addressing the company’s investor briefing on Tuesday, Group Chief Executive Officer, Keith Duncan, said the torrid business environments “especially in Jamaica and the Dominican Republic,” curtailed the company’s performance and has resulted in the declines in net operating revenue and net interest income posted for the half year ended September 30.

Net operating revenue dropped eight per cent to close the review period at $12.39 billion while there was a two per cent decline in net interest income, which closed at $5.70 billion.

The company recorded $3.63 billion in net profit.

Speaking to the performance of the investment business line “which has been an anchor” for the group over the years, Duncan said the results for this segment could not have been as good as yester years given the “rising interest rates; tightening of monetary policy and the pulling of liquidity out of the system.”

However, “We do know that as markets move back into some level of normalcy, we will be able to resume activity in this area…,” he said.

JMMB began 30 years ago as an investment house.

The directors “are comfortable that we have delivered the results in a difficult market environment and we will continue to deliver solid results going forward,” the CEO said.

The board of directors also declined a dividend payout to shareholders since: “We thought that based on the volatility that we continue to see in the market and the underlying liquidity challenges that the overall market faces, JMMB should be very conservative and not declare a dividend at this point in time…,” Duncan said.

The company will look to reward shareholders for their patience and investment choice “…as soon as market conditions begin to improve,” he said.

Earnings per share stood at $1.77 for the review period. Shareholders’ equity decreased by 15 per cent to $48 billion, over the period.

Going forward, Duncan said the company is continuing its strategy of regional diversification, business line diversification, the roll-out of new business lines and products; expanding client access, improving client experience and will be looking for inorganic growth through acquisitions.

JMMB will be launching its merchant acquiring solutions this year and will roll out its “long-awaited” banking app in short order, the CEO said.

JMMB is also continuing its focus on the rollout of smart branches in the Dominican Republic and Trinidad.

The company will also be investing over $5 billion in its real estate business line over the next few years, “in projects that will yield about 100,000 square feet of commercial space across Jamaica” with downtown Kingston and Mandeville tapped for the first projects.

As a newer player in the real estate market, JMMB Group is looking to plan, design, develop and construct properties and later bring to market for sale, lease or sale-leaseback.

The company is looking to capitalise on the growth potential in the commercial real estate market, targeting the development of commercial, warehousing and business process outsourcing (BPO) projects over the next two to three years.

The downtown Kingston and Mandeville projects will consist of approximately 33,000 square feet and 30,000 square feet of commercial office and BPO spaces respectively.

At the end of the six-month period, the group’s asset base stood at $637.85 billion, up four per cent relative to the start of the financial year, the company said.

This was driven by the 13 per cent growth in the loan portfolio totalling $161.45 billion.

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