Fri | Dec 4, 2020

Portland JSX outlook positive despite losses

Published:Friday | October 23, 2020 | 12:18 AM

Portland JSX Limited performed better in the second quarter, in which its losses slowed to $303,366.

Over six months ending August, spurred by a decline of $2.9 million in income, the fund spun from a profit of $1.4 million to a loss of US$1.7 million. The first- quarter loss was nearly five times as big as the second quarter, at US$1.4 million.

Portland JSX, which is a limited contributor to Caribbean Equity Fund II, is in its sixth year of its 10-year cycle and is fully invested at over US$27 million. Both funds are overseen by Michael Lee-Chin’s outfit, Portland Private Equity.

Managing Partner overseeing Portland JSX, Rob Almeida, says the losses notwithstanding, the fund remains optimistic about reaping returns from its investments, which includes backing for entities such as business process outsourcing firm itelBPO, tour company Chukka Caribbean Adventures, auto products distributor Tropical Battery, telecoms Liberty Latin America, and Clarien Bank; albeit, as he noted to shareholders last month, with a one- to two-year delay due to the pandemic. He indicated then that the realisation of US$70 million to US$80 million of returns had been disrupted.

“From a valuation perspective, whilst the current estimates of fair value have declined, we have not changed our expectations of future value for the portfolio,” Almeida told the Financial Gleaner this week.

Portland JSX is invested in a total of 15 businesses in Jamaica and the region, across a range of sectors, such as tourism and hospitality, distribution, power generation, telecoms, and finance – diversification that Almeida said has helped to mitigate adverse economic impact, estimated at under 10 per cent to date.

“We are pleased with the performance of the companies in the portfolio. The companies most impacted have strengthened their liquidity to be able to withstand the more pessimistic scenarios. Other companies are capitalising on acquisition and growth opportunities that have become available. And, some are doing both,” Almeida said, pointing to the recent initial public offering, IPO, of one portfolio company.

“Of note, Tropical Battery recently completed a successful IPO and is well positioned for growth,” he said.

Tropical Battery listed on the junior market of the Jamaica Stock Exchange at the end of September after raising $325 million of equity from stock market investors.