Sunday 20 September, 2020

Sterling shareholders receive 52 per cent more in dividend payout

Sterling shareholders have received an increase of 52.32 per cent more per share (in tax free USD) than the last dividend payout.

This is due to Sterling Investments Limited (SIL), an investment holding company managed by Sterling Asset Management, increasing its dividend payout ratio on realised gains by 30 per cent.

It’s a move that the company’s management hopes will provide well needed USD liquidity to its shareholders.

The company paid out a dividend of US$0.000361 per share payable on September 4. The last dividend was US$0.000237 per share in March 2020.

In an environment where the exchange rate is depreciating at a rapid rate, as at August 31,2020 it has depreciated by 12.6 per cent but peaked at J$151.18/1 on August 21, 2020.

In addition, dividends by some of the largest companies have been eliminated for this year. Shareholders are also benefit from the fact that SIL’s dividends are paid tax free as the company is incorporated in St Lucia, Sterling said in a press release.

Sterling Investments typically pays out 50 per cent of realised gains and distribute same as dividends to shareholders, however, the change in policy was decided at the board meeting held on August 10, 2020, where it was agreed to increase the payout ratio to 80 per cent.

As the company continues to grow, investors will find themselves earning larger amounts by way of dividends, Sterling said.

As at August 31, 2020 the dividend yield for SIL was 2.78 per cent (a comparable before tax yield would be 3.27 per cent) and this is expected to increase.

Sterling Investments Limited has recorded a net profit increase of 30 per cent since 2019 amidst the COVID-19 pandemic. The first six months of 2020 saw a total revenue of $131.32 million versus the $76.8 million observed for the same period in 2019.

Net income increased by 30.25 per cent from $57.13 million for the six months ended June 2019 to $74.41 million for the six months ended June 2020.

Foreign exchange gains increased more than two-fold from $28.84 million in the period ended June 2019 to $64.29 million in the period ended June 2020. The increase constitutes gains of 122.96 per cent over the period.

According to SIL, this was the combined result of increases in interest income and unrealized FX gains.

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