The Bermuda Stock Exchange listed financial services investment holding company, Somers Ltd., has reported a net loss over the second half of the year and substantial declines in shareholders’ equity and net asset value per share in its full year results for the year ended September 30, 2022.

In an overview of the six months ended this September, shareholders’ equity was reported at $337.4 million, a substantial reduction from the $617.8 million reported at the end of the same period last year.

The NAV per share of $13.82 was less than half of the $27.70 reported for the comparative date in 2021, after a special dividend in August of $4.55 per share.

The company reported a net loss of $147.7 million for the second half of the year, compared to a similar 2021 period net loss of $5.3 million. Somers said this was from a decrease in the market value of the investment portfolio.

Commenting on the financial results, Peter Durhager, Somers chairman said: “The recently completed financial year was a difficult one as our investments have been impacted by stock market volatility and foreign currency volatility which has negatively impacted our valuations.

“This has been caused by the tightening of financial conditions by the world’s central banks as they try to combat significant inflationary pressures.

“However, it is pleasing to note that for the most part our investments continue to perform well and in a number of cases outperform their competition. We believe that with its low level of gearing, Somers is well positioned to take advantage of the opportunities that are likely to emerge over the coming 12 months.”

The company reported a modest gearing ratio of 24.1 per cent compared to 13.1 per cent September 30, 2021.

In a summary of the six month results, the company said: “During the second half of the year, Somers’ investment portfolio reduced to $376.7 million (March 31, 2022: $583.8 million) owing to the current stock market volatility and foreign currency volatility.

“Consequently, the company recorded a $81.5 million loss on its investment portfolio (2021: gain of $7.0 million). This resulted in a net loss for the six months of $147.7 million (2021: loss of $5.3 million) and the resultant loss per share was $6.51 (2021: loss per share of $0.24).

“The unrealised loss was principally due to a decrease in the value of a number of the company’s investments. However, during the second half of the year, Waverton experienced strong growth in its FUMA and is now Somers’ largest investment.

“Resimac’s share price decreased by 43 per cent during the half year despite continuing to report strong underlying financial performance.

“Most of the company’s listed investments decreased in value in line with the broader stock market.

“Net foreign exchange losses were $76.3 million for the half year (2021: loss of $17.4 million).

“As at September 30, 2022 (some) 93.7 per cent of Somers' investment portfolio was exposed to foreign currencies, primarily Sterling and the Australian Dollar. Over the course of the six months ended September 30, 2022, the Australian dollar decreased in value versus the US Dollar by 14.2 per cent and Sterling fell by 15.3 per cent. These exchange gains were primarily unrealised.

“Somers’ total assets decreased over the half year to $422.2 million (September 30, 2021: $715.4 million) due to the valuation decreases and currency movements outlined above. The investment portfolio was $376.7 million as at September 30, 2022 (September 30, 2021: $660.7 million) with equity investments ($369.4 million) accounting for 98.1 per cent of this total.

“The remaining portfolio investments consisted of other financial investments. Within investments, Waverton at $144.8 million, Resimac at $136.9 million, and Thorn at $27.9 million together represent 82.2 per cent of total investments.

“Somers’ net asset value per share ended the year at $13.82 (September 30, 2021: $27.70) after the special dividend in August 2022 of $4.55 per share.”