QWI Reports Improvement in Bottom-Line for Q1 2023-24

• QWI Investments Limited (QWI) reported a net profit of $17.99Mn for its Q1 ending December 2023, which is a significant turnaround from the $64.92Mn net loss recorded in Q1 last year. The results reflected a slowdown in the pace of decline in the local stock market, but strong performance in its overseas portfolios.
• QWI overseas portfolio appreciated 13.9% during the quarter and produced unrealized gains of $71.69Mn. Market conditions in Jamaica remained unfavourable resulting in unrealised losses of $30.76Mn and realized losses of $3.92Mn.
• QWI's investment portfolio has high exposure to Jamaica equities (70% of its total portfolio). Throughout the December quarter, the Jamaican stock market declined as reflected in the -0.7% movement in the JSE Combined index. Although there were standouts, there was a general decline in stock prices due to the high interest rate environment and tight market liquidity, and this negatively impacted the growth in the company’s topline.
• In contrast US stocks defied expectations and posted a strong increase in share prices as buoyed by easing inflation, a resilient economy and the prospect of lower interest rates, especially in the last two months of the year. As such, QWI reported a $37.66Mn gain from its US investments portfolio compared to the $76.71Mn loss recorded in Q1 of the prior year.
• Earnings were tempered by the rise in administrative and selling expenses for the quarter, which amounted to $5.51Mn or 40.19% more than the $13.70Mn reported in the corresponding period of 2023. Admin costs were also higher largely due to higher accruals for investment management costs.
• QWI’s stock price has declined by 4.92% since the start of the calendar year to $0.58 on February 6, 2024, and it currently trades at a 53.6% discount to its net asset value (NAV). The most recent NAV per share was $ 1.25 as at December 2023.

(Sources: QWI Financials & NCBCM Research)