Imbert: UTC in good financial health

FINANCE Minister Colm Imbert says the Unit Trust Corporation (UTC) is in a strong financial position.

He made this comment in a statement in the House of Representatives on June 21 as he commented on the Auditor General's report on the UTC's consolidated financial statements for the year ended December 31, 2023.

"A total income of $915.2 million was recorded when compared to a loss of ($239.4 million) in the previous year, mainly resulting from favourable movements in the Fair Values of Investment Securities, which moved from an impairment of $1,032.7 million ($1.03 billion) in 2022 to a surplus of $20.6 million in 2023."

Imbert said this was due to to the UTC's adoption of IFRS 9 – Financial Instruments, which requires that investment securities be valued using the most recent market price at the reporting date.

"Any adjustments to the values of the investments are reported in the consolidated Statement of profit or loss."

Imbert said, "Investment income increased by 14 per cent from $776.5 million to $881.8 million due to improved dividend declarations and gains realised from increased interest. The TT$ Income Fund generated the highest income of $438.2 million, followed by Growth & Income Fund of $184.4 million. Both funds showed growth by eight and 7.6 per cent, respectively. Interest income and dividend income increased by 15.2 and 5.3 per cent respectively."

The UTC's annual net income for 2023 was $57.7 million, an increase of 10.5 per cent when compared to annual income of $52.2 million in 2022.

Imbert said the UTC's total assets marginally increased by $32.6 million from " $25,145.3 million ($25.145 billion) in 2022 to $25,177.9 million ($25.178 billion) in 2023.

This was attributed mainly due to improved cash flows from the corporation's TT$ and US$ income funds.

Imbert said this reflected adverse movements in financial markets.

He added there were healthy performances by the UTC's five investment funds which are domiciled in TT.

Imbert said the UTC paid $73.2 million in distributions to unitholders of its Growth and Income Fund, an increase of 32 per cent of the distributions paid to the fund's unitholders in 2022.

"This was the net result of the corporation’s long-term investment strategy and effective risk management."

With respect to distributions paid to unitholders in all five of its investment funds, the corporation paid a total of $308.7 million.

Imbert said this was an increase of 20.5 per cent or $52.4 million when compared to 2022.

"This was due to the higher distributions from the income funds in response to fluctuations in local and international interest rates."

He said UTC also emerged as one of the top five companies in terms of dividends being paid to investors, according to the Stock Exchange.

With respect to its expansion of services in the region, the UTC incorporated two wholly-owned regional subsidiaries in St Lucia – UTC Fund Management Services STL Ltd (FMS) and UTC Global Balanced Fund Ltd (GBFL).

In Jamaica, UTC entered into 50/50 joint venture arrangement with GK Capital Management, Grace Kennedy Ltd's to offer a suite of collective investment schemes there.

Through these and other activities, Imbert said UTC has "proven its strength and stability in the market by not only overcoming the economic downturn caused by (the) covid19 pandemic, but attracting new investors and establishing its presence in the Caribbean."

He added that for the sixth consecutive year, UTC has retained high ratings from rating agency the Caribbean Information and Credit Rating Services Limited (CariCRIS).

UTC achieved a CariAA issuer/corporate credit rating for foreign and local currency on the regional rating scale and ttAA on the TT national scale, from CariCris.

Imbert said, "These ratings clearly establish that UTC's investment portfolio continues to be well managed, with good asset quality and healthy investment returns."

He was confident that the corporation will maintain its stable credit profile over the next 12 to 15 months.