JSE’s Net Profit Declines YTD Due to Lower Revenues

• For the 6-month period ending June 2021, Jamaica Stock Exchange reported a net profit of $190.42Mn (EPS: $0.27), which was 10.7% lower than the same period last year. This was due to a 3.9% drop in revenues, driven by declines in cess fees and other operating income. 
• The drop in the bottom-line was also influenced by a modest rise in the company’s total expenses which grew YoY by 2.5% ($14.63Mn) owing to higher staff costs, professional fees and property expenses. 
• Despite the H1 falloff in net profit, the JSE realized a level of recovery in Q2 2021, with net profit growing by 32.2% supported by higher fee income and eCampus revenue. 
• JSE believes its performance will continue to be impacted by the global pandemic, as investor confidence remains below pre-COVID-19 levels. Nevertheless, market activity has picked up in 2021, and that should continue aided by new listings and improvements in market confidence and economic activity, particularly if the administration successfully improves the vaccination rate by September as planned. 
• The JSE indicated that it will continue to pursue a strategic path of growth through the promotion of new and existing markets, new product development and the continuous improvement in systems and service delivery to its customers and other stakeholders, which will support medium- to long-term growth. 
• Since the start of the year, the Jamaica Stock Exchange stock price has declined by 11.1% to $17.79, and currently trades at a P/E ratio of 32.3x earnings. This is above the main market financial sector average of 17.0x earnings.

(Source: Company Financials & NCBCM Research)