May 14, 2024

Sterling Investments Limited (SIL) for the first quarter ended March 31, 2024, reported a 4% increase in interest income totalling $37.43 million compared to $35.97 million in the corresponding three months last year. Management noted, “This was the result of the acquisition of new assets with higher interest rates.”

Foreign exchange loss amounted to $3.55 million (2023: $5.97 million), this represents a decrease of 41% year over year.

Net loss on sale of debt investment securities at FVOCI amounted to $3.91 million compared to a loss of $121,398 for the first quarter ended March 31, 2023. SIL highlighted, “This was the result of a partial call on a municipal bond holding and the strategic sale of securities that were due to mature or be called later in 2024. This created flexibility to acquire higher yielding assets. The new assets that were acquired to replace these securities had higher interest rates and higher current yields. Additionally, these replacement assets were purchased at yields which mostly compensated for any losses incurred.”

Total revenue closed at $29.97 million (2023: $29.88 million), while Total Expenses increased by 48% from $14.02 million in 2023 to $20.76 million for the three months. As a result, Operating Profit for the first quarter amounted to $9.21 million, a 42% decrease relative to $15.85 million reported in 2023.

Other loss for the three months amounted to $1,396, relative to other income of $9,493 reported in 2023. Pretax Profit totalled $9.21 million, a 42% decrease from the corresponding period last year. (2023: $15.86 million).

Net Income for the three months had a 42% decrease to reach $9.21 million (2023: $15.86 million).

Total comprehensive income for the three months amounted to $70.35 million, relative to a loss of $19.66 million reported in 2023.

Consequently, Earnings Per Share for the three months amounted to $0.02 (2023: $0.04). The twelve-month trailing EPS was $0.22, and the number of shares used in these calculations was 432,279,067.

Notably, SIL’s stock price closed the trading period on May 14, 2024, at a price of $2.40 with a corresponding P/E ratio of 10.81x.

Balance Sheet Highlights

The company’s assets totalled $1.85 billion (2023: $1.74 billion). This resulted from a 60% uptick in ‘cash and cash equivalents’ closing at $2.00 million.

Shareholder’s equity was $1.42 billion (2023: $1.22 billion), representing a book value per share of $3.28 (2023: $2.83).

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