2 months ago
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Barita Investments Limited reported a $627.5-million profit for the quarter, down 55 per cent from a year earlier, reflecting normalised activities following last year’s real estate revaluation in its investment holdings.
“The decline is largely the result of non-recurrence of gains from the alternative investment business line,” said Chairman Mark Myers in the earnings report to shareholders.
These gains a year ago reflected repricing of real estate at present market value.
For the March 2025 second quarter, total revenue dipped 40 per cent to $2.1 billion from $3.4 billion. Within the revenue pie, gains on investment activities fell 66 per cent to $744 million, and fees and commission income dipped 22 per cent to $950 million.
These declines were partially offset by a rise in foreign exchange trading, which grew to $242 million up from $172,000 a year earlier. Also, higher interest rates led to $212.6 million in net interest income for this quarter, a 52 per cent improvement relative to a year ago.
Barita benefited from the Bank of Jamaica’s 100-basis-point policy rate reduction from 7.0 per cent to 6.0 per cent, over the period. After the close of the quarter, the central bank reduced policy rates by a further 25 basis points to 5.75 per cent.
“We view the likelihood of a reversal of the current course of policy to be remote,” said Myers.
The broader economic environment posed challenges for the company, with major central banks maintaining “a cautious posture”. The US Federal Reserve has held the Federal Funds target range at 4.25 per cent to 4.50 per cent since December 2024, while futures markets are pricing in two to three rate cuts by year end.
“With these tailwinds in play, the balance of risk appears tilted towards an increasingly accommodative interest rate environment, which is supportive of our net interest income trajectory heading into the second half of the year,” said Myers.
Over six months, Barita’s profit totalled $1.18 billion, up from $1.9 billion a year earlier. Profit suffered from a 27.6 per cent dip in total revenue for the first half to $3.6 billion. This decline was driven “almost entirely” by a reduction in real estate-related revenues. The prior year, Barita benefited from “significant revaluation gains” from its real estate assets.
Myers indicated that traditional business lines beyond real estate showed resilience and underlying growth.
“This performance reflects the execution of Barita’s strategic pivot towards a more balanced and diversified revenue base, reducing reliance on less predictable sources of income,” the chairman noted. “It also highlights our ability to absorb cyclical declines in one business segment without compromising the integrity of our broader business model,” he said.
The company’s liquidity position remained robust with cash and equivalents at $4.4 billion, compared to $1.7 billion a year earlier. Barita’s assets increases to $146 billion from $134 billion a year earlier. Capital increased from $35.3 billion to $36.2 billion.
Barita Investments maintains a cautiously optimistic outlook amid a quarterly US economic decline and proposed US trade tariffs.
English (US) ·