Tue | Jan 19, 2021

Pandemic carves two-thirds of PanJam profit

Published:Friday | November 27, 2020 | 12:13 AM

PanJam’s earnings year to date have fallen two-thirds to $2 billion on the back of investment losses and reduced returns from its holdings in businesses like insurance behemoth Sagicor Group.

The property and investment conglomerate makes most of its earnings from its share of profit made by associated companies, but this year those results have been under pressure.

Last year, PanJam booked $3.54 billion in returns from associates over three quarters ending September, led by Sagicor Group, from which PanJam makes most of its money. Other associates include New Castle Company, adventure tour company Chukka Caribbean Adventures Limited, and hotel developer Caribe Hospitality Jamaica. This year, its associates contributed $2.87 billion of earnings in the same period.

That near a $670-million, or 19 per cent, decline, plus negative returns of $1 billion on investments that reversed gains of $1.6 billion last year, resulted in a 69 per cent erosion of profit, from $6.46 billion to $2.05 billion.

PanJam said the 19 per cent decline in returns from associates was driven by Sagicor’s performance, but was “also negatively influenced by results from the Courtyard by Marriott Kingston and Chukka Caribbean Adventures, both of which continue to see little business activity due to the COVID-19 pandemic,” the company said in its third-quarter financial report.

Courtyard was developed through Caribe Hospitality.

The conglomerate has previously announced plans to tap the market for US$100 million in financing, or around $14.8 billion in local currency, and is positioned to make the approach when the timing is right.

Cash holdings of $2 billion, combined with low leverage, “would enable us to raise financing in order to capitalise on attractively priced investment opportunities that may arise,” the company said.