2 months ago
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VM Investments Limited, VMIL, reported losses for the March first quarter amid global tensions, but deleveraged in the process.
The loss of $32.5 million, compared to profit of $510 million a year earlier, stemmed from increased expenses tied to capital market “headwinds”, credit loss provisions, and staff costs related to a “restructuring” initiative.
“This outturn included costs associated with a special restructuring exercise and the execution of our strategic initiative to onboard key personnel during the period to support expansion and drive revenue growth,” said VMIL in its report to shareholders.
Revenue totalled $542 million from $880.5 million a year earlier. The prior year’s profit of $510 million was elevated by a one-off gain of $422 million related to the disposal of Carilend which offers loans online.
During the quarter however, there were “significant dips” in US stocks, but also “increased yields” on fixed income instruments. It was related to the proposed imposition of tariffs by the United States.
VMIL’s quarterly revenue was hurt by the nearly two-thirds dip in the gain made from investments, which fell to $278 million from $687 million a year earlier. Its total operating expenses grew by 55 per cent to $728 million during the quarter, reflecting a fourfold increase in impairments, and one-third rise in staff costs.
VMIL reduced its leverage to 139 per cent from 188 per cent a year ago by cutting borrowing to $6.4 billion from $8.5 billion. Its capital increased by $100 million to $4.6 billion over the period.
Cash holding climbed to $2.4 billion from $462 million, as due to increased client repos and resale agreements, instruments that are often in demand in a flight to safety during periods of capital market upheaval.
Outside of the temporary market fluctuations, VMIL expects the US economy to slow down.
“This slowdown is attributed to increased uncertainty, trade tensions, and cautious business sentiment and evolving economic policies,” said the investment company run by CEO Rezworth Burchenson and chaired by Michael McMorris.
“We are confident that notwithstanding the current headwinds, the execution of our strategic pillars will, over the medium term, position VMIL as a stronger and profitable entity within the Caribbean and other markets that we serve,” the directors said.
English (US) ·