Proven posts first quarterly loss
Proven Investments Limited (PIL), a private equity investor, recorded losses of more than US$770,000 ($93 million) over three months ending December 2015, its first quarterly descent into red based on analysis of its 13 available quarters on the Jamaica Stock Exchange.
The loss was mainly due to the decision to rebalance some of the positions in Proven's financial portfolio, reducing the company's exposure to the high-yield bond market, and specifically the energy and mining sectors.
"Additionally, during the quarter, the portfolio was negatively affected by a bond-restructuring exercise, which saw our holdings in certain unsecured bonds being exchanged for new secured bonds, but at a reduced principal value," said Proven Investments' directors in its financial report.
Proven indicated that it was a very challenging quarter for the stock and bond-markets worldwide as commodity prices continued to fall, led by oil, with an adverse impact on commodity-producing economies. Bond prices fell and treasuries rallied as investors transitioned to the "safe haven" of US treasury bonds.
Proven earned more than double its net interest income at US$3.5 million in the December quarter, compared to US$1.3 million a year earlier, but the loss on securities trading during the quarter, which amounted to US$1.98 million, wiped out those gains. As a result, the company made operating loss of US$238,470 and then a net loss after tax of US$441,760. Finally, after accounting for costs for non-controlling interest, the net loss to shareholders climbed to US$770,270.
Over nine months, the company earned net profit of US$2.1 million, or a reduction of 54 per cent, when compared with the US$4.6 million generated for the same period in 2014. However, the previous year's results included a one-off net gain of US$1.36 million - US$4.2m pre-tax - from the purchase of subsidiary First Global Financial Services, and if excluded, would have resulted in a 35 per cent decline in net profit, said Proven.