Mayberry Group Losses Improve for the 9-Month Period Ending September 2024

• Mayberry Group Limited (MGL) reported a net loss attributable to shareholders of $560.91Mn for the nine months ending September 30, 2024 (9M 2024). This represents a 19.0% or $131.85Mn improvement on the $692.76Mn loss incurred for 9M 2023 amid a $2.35Bn rise in net operating income. 
• The rise in net operating income was primarily fueled by a $1.51Bn increase in net trading gains, largely from the sale of the Company's 20% stake in Caribbean Producers Jamaica Limited. Additionally, unrealised losses MGL’s fair value through profit and loss (FVTPL) portfolio decreased by 43.2%, or $898.99Mn.
• However, a $233.87Mn (22%) increase in net interest expense and an 11.1% decline in dividend partially offset higher operating income. Growth in securities sold under repurchase agreements (16%) and increased borrowings to fund operations (25%) accounted for the higher interest cost. The decline in dividend income was attributed to lower dividends paid by corporates due to the impact of Hurricane Beryl on earnings.
• Operating expenses rose by 18.7% (or $279.98Mn) primarily due to higher depreciation and amortization costs, assets tax payments, impairment provisions, and higher staff costs due to inflation adjustments.
• Notwithstanding the net loss, the company MGL’s capital base remained compliant with regulatory benchmarks. Its Q3 2024 capital-to-risk-weighted asset ratio was 17.7%, well above the 10% minimum set by the Financial Services Commission (FSC).
• Following the two successive interest rate cuts by the Bank of Jamaica’s Monetary Policy Committee (MPC), which signals the start of a turnaround in the monetary policy environment, management anticipates more positive tailwinds for its performance in the medium term.
• MGL’s stock price has depreciated by 12.5% since the start of the year to close Wednesday’s trading session at $7.82. It currently trades at a price-to-book of 0.59x, which is below the main market financial sector average of 1.05x.

(Sources: Mayberry Group Financials and NCBCM Research)