Ashford W. Meikle, Staff Reporter
DOTTIN
GUARDIAN HOLDINGS Limited (GHL) is expecting an improvement in its performance during the last quarter of this year, according to its group financial officer, Howard Dottin.
For its six months to June 30 this year, GHL has fallen short of its budgeted revenue by some seven per cent, as well as a reduction in the value of its investment portfolio.
During that period GHL had earned total revenue of US$354 million, some six per cent short of its budgeted target of US$380 million. But while Guardian's revenue is behind target it is still some twenty per cent ahead of the comparative figure for last year when it earned US$295 million.
Guardian's investment portfolio increased by some seven per cent, climbing from US$1.5 billion in the comparative period last year to US$1.6 billion in 2005. In Trinidad its equity portfolio - which totals US$931 million - is 49 per cent of the total investment portfolio compared to 12 per cent in Jamaica, amounting to $US240 million.
THE TAME CAPITAL MARKETS
Analysing the tame capital markets in Trinidad, Mr. Dottin noted, "During the second quarter the capital markets in Trinidad and Jamaica exhibited something that we found reasonably strange because at the beginning of the year we projected growth in both markets." He noted that while both indices had experienced active and robust trading earlier in the year, "In June everything started to reverse itself."
In Jamaica, for example, two Guardian subsidiaries wrote off their investments in the Dyoll Group - almost ten million shares with a total value of over US$2.2 million.
But it was not only the Jamaican and T&T capital markets - the company also suffered from its investments in the Dow Jones Industrial Average (DJIA) market in the United States. The DJIA has remained relatively flat, showing a slight increase since the beginning of the year.
LACKLUSTRE PERFORMANCE
With the lacklustre performance of the capital markets, there has been some amount of adjustment in the company's investment mix.
For example, at the end of last year, the equity part of its investment portfolio accounted for 33 per cent. However, by the end of June it only accounted for 30 per cent. According to Mr. Dottin, "The reason for the decline is predominantly the reduction in values of the investment because of the capital market."
But, Mr. Dottin maintained, "We are still of the strong view that the equities that we hold have good value, and what we have been going through to date is merely a correction and we should see some sort of reversal in the last quarter of 2005."
In fact, excluding realised and unrealised gains in its equity portfolio, the company remains on track for its revenue target. For example, its two major income streams, net premium income and investment income, were in line with the budgeted amounts.
