HBL reported 2QCY19 EPS of PkR0.44 (down 76.4/78.2% QoQ/YoY) where sequential performance was dragged by
realized loss on equities (PkR1.75bn), FX loss on unhedged borrowing (~PkR3.6bn) and higher non-markup expenses (+9.0%).
The reported GAAP net income was determined based primarily on the following: USD5.3 million of net interest income, USD1.7 million of net servicing income, a net realized gain of USD0.8 million on the RMBS portfolio, a net
realized loss of USD2.1 million on derivatives, a net unrealized gain of USD3.2 million on derivatives, a net unrealized gain of USD0.1 million on the Excess MSR portfolio, a net unrealized loss of USD1.8 million on the MSR portfolio and general and administrative expenses and management fees paid to Cherry Hill's external manager in the aggregate amount of USD1.7 million.
Although the Fund's share of the dividend's distribution stood at RO4.3 million, it recorded RO4.2 million of
realized loss and RO15 million of unrealized loss.
If the amount realized is less than the transferor's basis, a
realized loss will result.
The quarterly gains reflect the company's $9 million net realized gains on investments for the quarter, compared with a net
realized loss of $225 million last year.
Under the proposed regulations, A would have a
realized loss equal to the disappearing basis in the shares redeemed, but would not be able to recognize it until the earlier of the "final inclusion date" or the "accelerated loss inclusion date." The final inclusion date is a date after the distribution when the shareholder would first meet Sec.
Noles explains that the net realized gain in 2005 and the net
realized loss in 2004 were the result of extraordinary events.
Last year, the stock market decline resulted in a
realized loss of $280,000, compared to this year's realized gain of $350,000.
Tele2 had claimed allowance for a
realized loss, but the tax authority now claims that it was not proven that any reduction in value had occurred and dismissed the claim.
This recapture rule would not apply if the sum of all recapture amounts was less than 10% of the
realized loss. The loss rules generally do not incorporate the special rule for gains from sales of foreign affiliate stock.
The significant drivers of the decline in NAV for the quarter include 1) an unrealized mark-to-market loss our oil hedge which protects us against significant declines in the price of oil, partially offset by gains on our oil investment marks, 2) a
realized loss associated with the redemption of higher cost debt which has a payback period of approximately one year, and 3) a loss on our investment in Solarplicity Group, among other factors.
Total net
realized loss on investments in the fourth quarter 2015 was USD0.08 per share and total net change in unrealized depreciation on investments of USD0.47 per share, compared to a total net realized gain on investments of USD0.02 per share and a total net change in unrealized depreciation on investments of USD0.34 per share for the quarter ended December 31, 2014.
