Lascelles deMercado and Company is reporting a more than $3.5 billion depletion of its capital reserves, linked to a write-down on the fair value of its investments.

At balance sheet date March 31, 2009, the company's investment portfolio at $7.2 billion had lost more than a quarter of its value in half a year, and almost a third from a year ago when the portfolio was a much weightier $10.5 billion.

Lascelles, whose core operation centres on spirits, but whose businesses extend to insurance, merchandising and transportation services, also reported a 'recognised loss' of $1.5 billion.

Not at risk

It was not clear what if any assets the company might have sold at a loss, and Lascelles had not up to press time responded to requests for comment that financial controller Janene Shaw requested be emailed.

Otherwise, the company reported that its US$2.03 million (J$180 million) exposure to AIC Barbados bonds, which matured more than a month ago, and are now overdue, are not considered to be at risk.

"These bonds had a maturity date of April 8, 2009, however AIC Barbados has requested by resolution that the payment be deferred to June 11, 2009," said Lascelles in note seven to its March accounts.

"The directors are of the opinion that the principal and interest owing on this bond will be recoverable in full."

At a meeting with investors in Kingston AIC Chairman Michael Lee Chin had announced that he would repay the debt by disposing of some assets.

He is likely to sell the NCB Towers in New Kingston and/or his investment in Columbus Commu-nications, sources have said.

The value of the bonds are captured under cash and cash equivalents, said the conglomerate whose net worth has dropped from $25.7 billion at September 2008 to $24.12 billion at March 2009.

Its profit performance was mixed.

The half-year profits were down from $1.16 billion to $939 million in the review period, but midline income for the second quarter was robust at $598 million compared with $177 million at 2Q March 2008.

Net profit in the second quarter quadrupled to $945 million, compared with $242 million in the 2008 period, while half yearly profit rose from $1.18 billion or $12.27 per share to $1.36 billion or $14.18 per share.

Revenues rose by a billion dollars to $12.17 billion for the group, $6.4 billion of which was earned in the second quarter.

Lascelles, however, grew net profit in the half year only because of better-than-normal results from finance income, which added $623 million to pretax profit compared with $170 million in HY2008 and $355 million for the full 12-month period that year.

business@gleanerjm.com