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Share Name Share Symbol Market Type Share ISIN Share Description
Aberdeen Latin American Income Fund Limited LSE:ALAI London Ordinary Share JE00B44ZTP62 ORD NPV
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.80p +1.12% 72.00p 70.80p 71.20p 72.00p 72.00p 72.00p 25,014 09:02:54
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 3.1 2.4 3.8 19.0 47.20

Aberdeen Latin American Inc Fd Ltd Half-Yearly Report

29/04/2019 7:00am

UK Regulatory (RNS & others)


Aberdeen Latin American ... (LSE:ALAI)
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2 Months : From Apr 2019 to Jun 2019

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TIDMALAI

RNS Number : 3009X

Aberdeen Latin American Inc Fd Ltd

29 April 2019

29 April 2019

Aberdeen Latin American Income Fund Limited

Legal Entity Identifier (LEI): 549300DN623WEGE2MY04

Half Yearly Results for the Six Months to 28 February 2019

Information disclosed in accordance with paragraph 4.2 of the Disclosure Guidance and Transparency Rules

The investment objective of the Company is to provide Ordinary shareholders with a total return, with an above average yield, primarily through investing in Latin American securities.

 
                                         28 February   31 August         % 
                                                2019        2018    change 
 Total assets (GBP'000)                       52,716      48,825      +8.0 
 Equity shareholders' funds (GBP'000)         46,216      42,325      +9.2 
 Net asset value per Ordinary 
  share                                       78.22p      70.34p     +11.2 
 Ordinary share price (mid-market)            68.20p      60.80p     +12.2 
 Discount to net asset value on 
  Ordinary shares{A}                           12.8%       13.6% 
 Net gearing{A}                                13.5%       14.2% 
 Ongoing charges ratio{A}                      2.00%       2.00% 
 
 {A} Considered to be an Alternative Performance Measure. 
 
 
 Performance (total return){A} 
 
                                                     Six months        Year 
                                                          ended       ended 
                                                    28 February   31 August 
                                                           2019        2018 
 Net asset value                                         +13.8%      -18.8% 
 Ordinary share price                                    +15.3%      -18.5% 
 Composite MSCI EM Latin American 10/40 Index/JP 
  Morgan GBI-EM Global Diversified Index (Latin 
  America carve out)(sterling adjusted)                  +11.2%      -10.9% 
 
 Source: Aberdeen Standard Investments, Lipper and Morningstar. 
 {A} Considered to be an Alternative Performance Measure. 
 

INTERIM BOARD REPORT - CHAIRMAN'S STATEMENT

Overview

The Company's Net Asset Value ("NAV") total return (capital return plus dividends reinvested) rose by 13.8% during the six month period ended 28 February 2019, ahead of the composite benchmark's 11.2% gain. During the period, the Ordinary shares delivered a share price total return of 15.3%.

Latin American equities and bonds performed strongly in the six months under review, despite a litany of global worries, such as prolonged trade tensions between the US and China, the US Federal Reserve's accelerated policy normalisation and concerns over a slowdown in global economic growth. The key events that shaped the performance, however, predominantly came from within the region, specifically the election outcomes and policies of the governments in Brazil and Mexico.

At the beginning of the period, the market snapped back from the aftermath of the third-quarter of 2018, when the fiscal crisis in Argentina had sent markets into a tailspin. The rebound began in Mexico, where early optimism over President Andrés Manuel López Obrador's (AMLO) seemingly market friendly rhetoric and structural reform agenda wooed investors. Additionally, the preliminary US-Mexico-Canada trade agreement (USMCA) boosted sentiment. In Brazil, stocks rebounded ahead of Jair Bolsonaro's win in the presidential elections in October, and maintained its upward momentum on the back of higher investor confidence in the new government's reform agenda.

Soon after, however, share prices declined and continued to fall until the period end. Mexican stocks sold-off after the AMLO government cancelled a multi-billion dollar international airport project, based on a controversial referendum. Growing concerns over the government's use of such public consultations to decide on key infrastructure projects, as well as its policy limiting the banking sector's ability to charge fees, kept investors at bay. Tightening monetary conditions brought on by the Fed's fourth rate hike in December put pressure on local currencies and hampered returns. Currency depreciation was more pronounced in Mexico, Peru, Colombia and Argentina. Mexican and Argentinian central banks were compelled to followed suit, raising their rates, while Colombia held its rate unchanged. Despite fresh austerity measures and an increased IMF bailout, Argentina struggled to get the peso and its economy back on track.

Mitigating losses were gains in Brazil, where the real bounced back and markets rallied amid sustained investor confidence in the economic and structural reform policies of the Bolsonaro government, in particular the much-watched pension reform bill that was submitted to Congress in February. Despite a devastating disaster in Minas Gerais in January that shook up the mining industry, Brazilian equities held up well, and even gained on the back of higher iron-ore prices. The spike in iron ore was due to speculation of possible supply shortages stemming from the authorities shutting down several other mining operations run by Vale, the operator involved in the disaster.

Since the beginning of 2019, markets rebounded on positive sentiment over the Fed's decision to hold fire and take a more patient approach towards further tightening. Still, headwinds prevailed from continued uncertainty about the Mexican government's increasingly interventionist policies and doubts about its commitment to push through effective reforms in the energy sector. Overall, the energy sector experienced some volatility over the period due to unstable oil prices. Brazilian state-owned oil company Petrobas, which the Manager introduced in the period, emerged a winner in this environment. However, the portfolio's relatively lower exposure to the company capped gains.

Dividends

We have declared a second interim dividend of 0.875p per Ordinary share in respect of the year to 31 August 2019 payable on 17 May 2019 to Ordinary shareholders on the register on the record date of 3 May 2019.

Board Changes

Martin Adams retired as a non-executive Director of the Company on 13 December 2018, having served on the Board since launch in 2010. The Board wishes to express their sincere thanks to Martin for his significant contribution to the Company during his tenure.

The Board regularly considers Board composition and succession planning and was delighted to welcome Heather MacCallum as a non-executive Director with effect from 24 April 2019. Heather was previously a partner of KPMG LLP and has extensive financial services and investment companies experience, and the Board looks forward to working with her.

Share Capital

During the period the Company purchased 1,090,000 Ordinary shares for cancellation at a weighted average discount of 13.0% to the prevailing NAV per share (ex income). The Board will continue to make selective use of share buybacks, subject to prevailing market conditions and where to do so would be in Shareholders' interests. Subsequent to the period end a further 330,000 Ordinary shares have been purchased for cancellation. At the date of this report, there are 58,755,324 Ordinary Shares in issue and 6,107,500 held in treasury and the Ordinary shares are trading at a discount of 12.4% to the NAV (ex income).

Gearing

The level of drawings under the Company's three year GBP8 million multi-currency revolving facility agreement with Scotiabank (Ireland) Designated Activity Company remained constant at GBP6.5 million throughout the six months under review. This represents net gearing of 13.5% at the period end. The Board will continue to monitor the level of gearing under recommendation from the Investment Manager and in the light of market conditions.

Ongoing Charges

As previously indicated, the Board is pleased to have secured agreement from the Manager to ensure that the Company's ongoing charges ratio ("OCR") will not exceed 2.0% when calculated annually as at 31 August. To the extent that the OCR exceeds 2.0% the Manager will rebate part of its fees in order to bring that ratio down to 2.0%.

Outlook

Coming into the new year, the outlook for the global economy has somewhat improved with the possibility of the US-China trade spat being resolved soon. Despite this, investors remain nervous as GDP growth forecasts have been downgraded. Acknowledging this deterioration in the global economic momentum, the Fed responded with a wait-and-see stance and markets have cheered the prospect of a suspension in rate hikes for the first half of 2019. Emerging markets stand to benefit from this, as the pressure on their central banks to defend their currencies ease.

In Latin America, regional politics continues to be a determinant of market direction. In Brazil, investors are watchful over the progress of the pension bill that was submitted to Congress. While confident that the bill will eventually pass, it is likely the original proposal will be diluted and take longer than previously expected since a Constitutional amendment, backed by a qualified majority of 60% in both the lower house and Senate is necessary. Despite brewing political scandals, investors seem encouraged by the administration's commitment towards fiscal and structural reforms. Bolsonaro's attempt to improve relations with the US might also open doors for increased bilateral trade between the two largest nations in the Americas.

Investors, however, are less enamoured with developments in Mexico. The AMLO government's "public consultation" reflects populism, which will weigh on confidence and serves to keep foreign investors aloof. The central bank shaved its growth forecast and the peso has yet to recover from oil price volatility.

Despite the short-term uncertainties, I remain optimistic about your Company's high-quality portfolio, given its resilience. I also have confidence in your Manager's ability to select investments backed by solid fundamentals and long-term growth potential that will continue to deliver robust yields.

Richard Prosser

Chairman

26 April 2019

INTERIM BOARD REPORT - INVESTMENT MANAGER'S REVIEW

Performance Commentary

Latin American equities faced increased volatility during the period under review but edged higher ahead of other emerging markets in sterling terms. On the global front, investors were more optimistic amid signs that the US-China trade spat was nearing an end, as well as continued reassurances from the US Federal Reserve that no further rate hikes were planned for the first half of the year. However, the key events that shaped the market during the six months came from within the region. Jair Bolsonaro's presidential election win in October helped the market recover on expectation that his proposed reforms agendas could boost economic health. In contrast, Mexico sold-off on increased concerns around controversial policies under the newly-elected President López Obrador. The central bank also lowered its growth forecast following fuel rationing and lower crude production.

Against this backdrop, your Company's equity portfolio advanced significantly by 16.49% in sterling terms, ahead of the benchmark MSCI Emerging Markets Latin America 10/40 Index's 13.83% gain.

The choice of holdings in Brazil and Mexico added to performance. At the stock level, the main contributor was Lojas Renner. Its robust performance benefited from the recovery in consumption and continued good execution. Software provider Linx also did well, as it revealed the launch of its payment business. Arezzo, Multiplan and Ultrapar contributed to gains as stock prices recovered from earlier weakness, on improved sentiment and positive economic outlook under the new Brazilian president. Meanwhile, not holding Mexican America Movil and Grupo Televisa was also positive for your company, as these led the market decline on disappointing results, affected by the weaker Mexican peso.

On the flip side, your portfolio's lower exposure to Petrobras was the main detractor as the Brazilian state-owned oil company performed well, driven by positive sentiment around the presidential election outcome. Mexican bank Banorte suffered on the back of concerns around potential government intervention in the banking sector, particularly on fee-income and the pension business.

In the six months under review both the regional and the broader global environment became more positive for the Latin American debt markets. Currencies broadly stabilised after the significant depreciation seen in the first half of last year. Inflation started to converge towards the central banks' inflation targets, while economic activity was weaker than expected, allowing the monetary authorities to end the rate hiking cycles and move towards a neutral stance. This policy shift was further supported by the Federal Reserve stepping back from its rate hiking policy. The recovery of the commodities markets towards the end of the review period was also helpful.

Within the region, performance varied between countries. Brazil was the outperformer, with both the currency and local bonds recording significant gains. This can largely be explained by the election of Jair Bolsonaro as president in October, and his choice of a credible and market-friendly economic team. As a result markets went from pricing in 400 basis points of rate hikes before the elections to completely pricing out any tightening, bringing down the entire yield curve. On the other side, Argentina substantially underperformed its regional peers. Despite the economic recession, fiscal consolidation and very high interest rates, inflation continued to rise throughout the review period, putting pressure on the local bond market and also the currency.

Against this backdrop, your Company's bond portfolio advanced by 8.24% in sterling terms, ahead of the benchmark JPM GBI-EM Global Diversified Latin America Index's 7.12% gain.

Portfolio Activity

During the period, we made several changes to the equity holdings within your portfolio, adding and paring stocks based out their performance and outlook. Notably, we exited Hering, Iguatemi and Bancolombia after share price outperformance and reinvested the proceeds in other high-conviction names. Your portfolio now includes Petrobras and Notre Dame Intermedica. Petrobras is the largest petroleum company in Brazil. We added the company on its improving outlook and higher conviction to its overall deleveraging drive. Meanwhile, Notre Dame Intermedica is a high quality integrated healthcare operator in a segment with plenty of potential growth. We also remain positive on its outlook.

In the bond portfolio, we reduced exposure to Mexican rates and currency, concerned by the new president's unorthodox and populist economic policies. We increased our exposure to the Colombian peso, as the currency weakened following the big drop in international oil prices in the last quarter of 2018. However, we have trimmed our duration exposure in Colombia after the strong performance of local rates. We also added exposure in Argentina, through the most defensive short dated policy rate linked instruments, which provide an exceptionally high coupon yield.

Outlook

It is likely to be a volatile year for Latin America, as global concerns around trade developments, the direction of the US dollar as well as the oil price will continue to pose risks. Within the region, local politics, reform and infrastructure developments will determine investor sentiment. While the political calendar is much quieter than last year, when we saw elections in Brazil, Mexico and Colombia, the election in Argentina in October will keep investors excited. Beyond that, political volatility should be less impactful than 2018, allowing the region to focus on delivering stable, sustainable and inclusive growth. This should have a positive impact on corporate earnings and share prices. In the longer term, population growth, a more affluent middle class and low labour costs, should be positive for the domestic economy. The economic push will be supportive for most companies, in particular financials and consumer companies. Moreover, valuations remain compelling relative to their global peers.

We continue to believe that the region offers great value for long term investors and are optimistic about your Company's outlook. Latin American countries in general have seen their external balances improved in the last few years, while the rate hikes last year demonstrated the authorities' ability to react in the face of market pressures. We have also seen efforts to improve the fiscal balances, although there remains a lot to be done for many countries.

Against this backdrop, the bond portfolio continues to generate sufficient income, while the equity portfolio remains focused on selecting stocks that can benefit from stable growth, healthy consumption and structural improvements. This, along with their solid balance sheets and good management provide us with added confidence. We continue to engage with company's management to ensure that their goals continue to be aligned with that of the shareholders' and remain diligent in our efforts to drive improvement and shareholder returns. At the same time, we continue to look out for other investment opportunities that can take advantage of new growth opportunities, to ensure that the portfolio remains well-positioned for the future.

Aberdeen Asset Managers Limited

26 April 2019

INTERIM BOARD REPORT

Going Concern

The Directors have undertaken a rigorous review of the Company's ability to continue as a going concern. The Company's assets, including those of its subsidiary, consist of a diverse portfolio of listed equities, equity-related investments and fixed income investments which, in most circumstances, are realisable within a very short timescale.

The Directors are mindful of the principal risks and uncertainties disclosed below and review on a regular basis forecasts detailing revenue and liabilities and the Company's operational expenses. Consequently the Directors believe that the Company has adequate financial resources to continue its operational existence for the foreseeable future and at least 12 months from the date of this Half-Yearly Report. Accordingly, they continue to adopt the going concern basis in preparing the Half-Yearly Report.

Principal Risks and Uncertainties

The principal risks and uncertainties affecting the Company are set out in detail on page 10 of the Annual Report and Financial Statements for the year ended 31 August 2018 and have not changed. They can be summarised under the following headings:

   -     Investment strategy and objectives; 
   -     Investment portfolio, investment management; 
   -     Financial obligations; 
   -     Financial and regulatory; 
   -     Operational; and 
   -     Income and dividend risk. 

Directors' Responsibility Statement

The Directors are responsible for preparing this Half-Yearly Report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge:

- The condensed set of financial statements has been prepared in accordance with International Accounting Standards (IAS) 34 "Interim Financial Reporting" and gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and,

- the Interim Board Report contained within the Half-Yearly Report includes a fair review of the information required by 4.2.7R and 4.2.8R of the FCA's Disclosure Guidance and Transparency Rules.

The Half-Yearly Report includes a fair review of the information required on material transactions with related parties and any changes to those described in the Annual Report.

For and on behalf of the Board

Richard Prosser

Chairman

26 April 2019

Investment Portfolio - Equities

As at 28 February 2019

 
                                                                   Total 
                                                   Valuation   assets(C) 
 Company                              Country        GBP'000           % 
-----------------------------------  -----------  ----------  ---------- 
 Banco Bradesco ADR(A)                Brazil           2,669         5.1 
 Itau Unibanco Holdings ADR(A)        Brazil           2,308         4.4 
 Petrobras(B)                         Brazil           1,946         3.7 
 Lojas Renner(B)                      Brazil           1,184         2.2 
 Grupo Financiero Banorte             Mexico           1,176         2.2 
 Fomento Economico Mexicano ADR       Mexico           1,158         2.2 
 Bradespar(B)                         Brazil           1,103         2.1 
 Grupo Aeroportuario Sureste ADR      Mexico           1,057         2.0 
 Ambev(B)                             Brazil             995         1.9 
 Vale ADR                             Brazil             950         1.8 
===================================  ===========  ==========  ========== 
 Top ten equity investments                           14,546        27.6 
================================================  ==========  ========== 
 Multiplan Empreendimentos(B)         Brazil             902         1.7 
 Wal-Mart de Mexico                   Mexico             886         1.7 
 B3 Brasil Bolsa Balco(B)             Brazil             886         1.7 
 Localiza Rent A Car(B)               Brazil             685         1.3 
 Arca Continental                     Mexico             670         1.3 
 Arezzo Industria e Comercio(B)       Brazil             636         1.2 
 Ultrapar Participacoes ADR           Brazil             556         1.1 
 Banco Santander-Chile ADR            Chile              486         0.9 
 Parque Arauco(B)                     Chile              484         0.9 
 Embotelladora Andina 'A' Pref(B)     Chile              471         0.9 
===================================  ===========  ==========  ========== 
 Top twenty equity investments                        21,208        40.3 
================================================  ==========  ========== 
 S.A.C.I. Falabella(B)                Chile              466         0.9 
 WEG(B)                               Brazil             454         0.9 
 Infraestructura Energetica Nova      Mexico             443         0.8 
 TOTVS(B)                             Brazil             440         0.8 
 Odontoprev(B)                        Brazil             390         0.7 
 Linx(B)                              Brazil             372         0.7 
 Globant                              Argentina          368         0.7 
 Wilson, Sons(B)                      Brazil             367         0.7 
 Grupo Finaciero Santander            Mexico             362         0.7 
 Itausa Investimentos Itau Pref(B)    Brazil             354         0.7 
===================================  ===========  ==========  ========== 
 Top thirty equity investments                        25,224        47.9 
================================================  ==========  ========== 
 Cementos Pacasmayo                   Peru               320         0.6 
 Notredame Intermedica(B)             Brazil             302         0.6 
 Tenaris ADR                          Argentina          298         0.6 
 Hoteles City Express                 Mexico             283         0.5 
 BBVA Banco Frances                   Argentina          270         0.5 
 Raia Drogasil(B)                     Brazil             265         0.5 
 Kimberly-Clark de Mexico             Mexico             257         0.5 
 Grupo Lala                           Mexico             228         0.4 
 Valid Solucoes(B)                    Brazil             223         0.4 
 Brasil Foods(B)                      Brazil             203         0.4 
===================================  ===========  ==========  ========== 
 Top forty equity investments                         27,873        52.9 
================================================  ==========  ========== 
 Brasil Foods Sponsored ADR           Brazil             138         0.3 
 Grupo Aeroportuario Centro Norte     Mexico             127         0.2 
 Grana Y Montero                      Peru               124         0.2 
 Ultrapar Participacoes(B)            Brazil             102         0.2 
 Fossal                               Peru                 2         0.0 
-----------------------------------  -----------  ----------  ---------- 
 Total equity investments                             28,366        53.8 
------------------------------------------------  ----------  ---------- 
 (A) Holding includes investment in common and ADR lines. 
 (B) Held in Subsidiary. 
 (C) Excluding bank loans of GBP6,500,000. 
 

Investment Portfolio - Bonds

As at 28 February 2019

 
                                                                  Total 
                                                  Valuation   assets(B) 
 Issue                                              GBP'000           % 
-----------------------------------------------  ----------  ---------- 
 Brazil (Fed Rep of) 10% 01/01/25(A)                  4,557         8.6 
 Colombia (Rep of) 9.85% 28/06/27                     3,397         6.4 
 Brazil (Fed Rep of) 10% 01/01/21(A)                  3,011         5.7 
 Mex Bonos Desarr Fix Rt 10% 20/11/36                 2,005         3.8 
 Mex Bonos Desarr Fix Rt 8.5% 18/11/38                1,720         3.3 
 Uruguay (Rep of) 4.375% 15/12/28                     1,699         3.2 
 Peru (Rep of) 6.95% 12/08/31                         1,276         2.4 
 Argentina (Rep of) Frn 21/06/20                      1,136         2.2 
 Petroleos Mexicanos 7.47% 12/11/26                     826         1.6 
 Uruguay (Rep of) 9.875% 20/06/22                       781         1.5 
===============================================  ==========  ========== 
 Top ten bond investments                            20,408        38.7 
===============================================  ==========  ========== 
 Uruguay (Rep of) 4.25% 05/04/27                        757         1.4 
 Brazil (Fed Rep of) 10% 01/01/27(A)                    616         1.2 
 Mex Bonos Desarr Fix Rt 10% 05/12/24                   581         1.1 
 Peru (Rep of) 6.95% 12/08/31                           405         0.8 
 Argentina (Rep of) 15.5% 17/10/26                      308         0.6 
 Mexico (United Mexican States) 7.75% 13/11/42          125         0.3 
 Petroleos Mexicanos 7.19% 12/09/24                     120         0.2 
 Peru (Rep of) 6.15% 12/08/32                            58         0.1 
===============================================  ==========  ========== 
 Total value of bonds                                23,378        44.4 
===============================================  ==========  ========== 
 Total value of equity investments                   28,366        53.8 
-----------------------------------------------  ----------  ---------- 
 Total value of portfolio investments                51,744        98.2 
-----------------------------------------------  ----------  ---------- 
 Other net assets held in subsidiary                    310         0.6 
-----------------------------------------------  ----------  ---------- 
 Total investments                                   52,054        98.8 
-----------------------------------------------  ----------  ---------- 
 Net current assets(B)                                  662         1.2 
-----------------------------------------------  ----------  ---------- 
 Total assets(B)                                     52,716       100.0 
-----------------------------------------------  ----------  ---------- 
 (A) Held in Subsidiary. 
 (B) Excluding bank loans of GBP6,500,000. 
 

Distribution of Investments

As at 28 February 2019

 
              Equities    Bonds    Total 
 Country             %        %        % 
 Argentina         1.8      2.8      4.6 
 Brazil           35.5     15.8     51.3 
 Chile             3.7        -      3.7 
 Colombia            -      6.6      6.6 
 Mexico           12.8     10.4     23.2 
 Peru              0.9      3.4      4.3 
 Uruguay             -      6.3      6.3 
                ______   ______   ______ 
                  54.7     45.3    100.0 
                ______   ______   ______ 
 

Condensed Statement of Comprehensive Income

 
                                                        Six months ended 
                                                        28 February 2019 
                                                           (unaudited) 
                                                  Revenue     Capital       Total 
                                        Notes     GBP'000     GBP'000     GBP'000 
 Income 
 Income from investments                  3         1,641           -       1,641 
 Gains/(losses) on financial assets 
  held at fair value through profit 
  or loss                                               -       4,589       4,589 
 Currency (losses)/gains                                -        (66)        (66) 
 Gains/(losses) on forward currency 
  contracts held at fair value                          -          60          60 
                                                _________   _________   _________ 
                                                    1,641       4,583       6,224 
                                                _________   _________   _________ 
 Expenses 
 Investment management fee                          (104)       (156)       (260) 
 Other operating expenses                 4         (216)           -       (216) 
                                                _________   _________   _________ 
 Profit/(loss) before finance 
  costs and taxation                                1,321       4,427       5,748 
 
 Finance costs                                       (24)        (36)        (60) 
                                                _________   _________   _________ 
 Profit/(loss) before taxation                      1,297       4,391       5,688 
 
 Taxation                                            (25)           -        (25) 
                                                _________   _________   _________ 
 Profit/(loss) for the period                       1,272       4,391       5,663 
                                                _________   _________   _________ 
 
 Earnings per Ordinary share (pence)      5          2.13        7.36        9.49 
                                                _________   _________   _________ 
 
 The profit/(loss) for the period is also the comprehensive income 
  for the period. 
 The total columns of this statement represent the Statement of 
  Comprehensive Income, prepared in accordance with IFRS. The revenue 
  and capital columns are supplementary to this and are prepared 
  under guidance published by the Association of Investment Companies. 
 All items in the above statement derive from continuing operations. 
 The accompanying notes are an integral part of the financial 
  statements. 
 

Condensed Statement of Comprehensive Income (Cont'd)

 
                                                        Six months ended 
                                                        28 February 2018 
                                                           (unaudited) 
                                                  Revenue     Capital       Total 
                                        Notes     GBP'000     GBP'000     GBP'000 
 Income 
 Income from investments                  3         1,600           -       1,600 
 Gains/(losses) on financial assets 
  held at fair value through profit 
  or loss                                               -     (3,639)     (3,639) 
 Currency (losses)/gains                                -          13          13 
 Gains/(losses) on forward currency 
  contracts held at fair value                          -        (43)        (43) 
                                                _________   _________   _________ 
                                                    1,600     (3,669)     (2,069) 
                                                _________   _________   _________ 
 Expenses 
 Investment management fee                          (117)       (175)       (292) 
 Other operating expenses                 4         (261)           -       (261) 
                                                _________   _________   _________ 
 Profit/(loss) before finance 
  costs and taxation                                1,222     (3,844)     (2,622) 
 
 Finance costs                                       (20)        (30)        (50) 
                                                _________   _________   _________ 
 Profit/(loss) before taxation                      1,202     (3,874)     (2,672) 
 
 Taxation                                            (33)           -        (33) 
                                                _________   _________   _________ 
 Profit/(loss) for the period                       1,169     (3,874)     (2,705) 
                                                _________   _________   _________ 
 
 Earnings per Ordinary share (pence)      5          1.89      (6.27)      (4.38) 
                                                _________   _________   _________ 
 
 The profit/(loss) for the period is also the comprehensive income 
  for the period. 
 The total columns of this statement represent the Statement of 
  Comprehensive Income, prepared in accordance with IFRS. The revenue 
  and capital columns are supplementary to this and are prepared 
  under guidance published by the Association of Investment Companies. 
 All items in the above statement derive from continuing operations. 
 The accompanying notes are an integral part of the financial 
  statements. 
 

Condensed Statement of Comprehensive Income (Cont'd)

 
                                                           Year ended 
                                                         31 August 2018 
                                                            (audited) 
                                                  Revenue     Capital       Total 
                                        Notes     GBP'000     GBP'000     GBP'000 
 Income 
 Income from investments                  3         3,095           -       3,095 
 Gains/(losses) on financial assets 
  held at fair value through profit 
  or loss                                               -    (12,043)    (12,043) 
 Currency (losses)/gains                                -          44          44 
 Gains/(losses) on forward currency 
  contracts held at fair value                          -        (42)        (42) 
                                                _________   _________   _________ 
                                                    3,095    (12,041)     (8,946) 
                                                _________   _________   _________ 
 Expenses 
 Investment management fee                          (222)       (333)       (555) 
 Other operating expenses                 4         (473)           -       (473) 
                                                _________   _________   _________ 
 Profit/(loss) before finance 
  costs and taxation                                2,400    (12,374)     (9,974) 
 
 Finance costs                                       (42)        (63)       (105) 
                                                _________   _________   _________ 
 Profit/(loss) before taxation                      2,358    (12,437)    (10,079) 
 
 Taxation                                            (45)       (171)       (216) 
                                                _________   _________   _________ 
 Profit/(loss) for the period                       2,313    (12,608)    (10,295) 
                                                _________   _________   _________ 
 
 Earnings per Ordinary share (pence)      5          3.78     (20.62)     (16.84) 
                                                _________   _________   _________ 
 
 The profit/(loss) for the period is also the comprehensive income 
  for the period. 
 The total columns of this statement represent the Statement of 
  Comprehensive Income, prepared in accordance with IFRS. The revenue 
  and capital columns are supplementary to this and are prepared 
  under guidance published by the Association of Investment Companies. 
 All items in the above statement derive from continuing operations. 
 The accompanying notes are an integral part of the financial 
  statements. 
 

Condensed Balance Sheet

 
                                                     As at         As at       As at 
                                               28 February   28 February   31 August 
                                                      2019          2018        2018 
                                               (unaudited)   (unaudited)   (audited) 
                                       Notes       GBP'000       GBP'000     GBP'000 
 Non-current assets 
 Investments held at fair value 
  through profit or loss                            52,054        57,603      48,277 
                                                 _________     _________   _________ 
 Current assets 
 Cash                                                  290            36         411 
 Forward foreign currency contracts                    115            68          96 
 Other receivables                                     612           595         442 
                                                 _________     _________   _________ 
                                                     1,017           699         949 
                                                 _________     _________   _________ 
 Current liabilities 
 Bank loan                                 8       (6,500)       (6,500)     (6,500) 
 Forward foreign currency contracts                   (55)           (1)        (35) 
 Other payables                                      (300)         (203)       (366) 
                                                 _________     _________   _________ 
                                                   (6,855)       (6,704)     (6,901) 
                                                 _________     _________   _________ 
 Net current liabilities                           (5,838)       (6,005)     (5,952) 
                                                 _________     _________   _________ 
 Net assets                                         46,216        51,598      42,325 
                                                 _________     _________   _________ 
 
 Equity capital and reserves 
 Equity capital                            9        65,936        65,936      65,936 
 Capital reserve                                  (22,195)      (16,504)    (25,861) 
 Revenue reserve                                     2,475         2,166       2,250 
                                                 _________     _________   _________ 
 Equity shareholders' funds                         46,216        51,598      42,325 
                                                 _________     _________   _________ 
 
 Net asset value per Ordinary 
  share (pence)                           10         78.22         84.47       70.34 
                                                 _________     _________   _________ 
 
 The accompanying notes are an integral part of the financial statements. 
 

Condensed Statement of Changes in Equity

 
 Six months ended 28 February 
  2019 (unaudited) 
                                          Stated    Capital   Revenue 
                                         capital    reserve   reserve      Total 
                                 Notes   GBP'000    GBP'000   GBP'000    GBP'000 
 Balance at 31 August 2018                65,936   (25,861)     2,250     42,325 
 Profit for the period                         -      4,391     1,272      5,663 
 Dividends paid                    6           -          -   (1,047)    (1,047) 
 Purchase of own shares for 
  treasury                                     -      (725)         -      (725) 
                                          ______     ______    ______     ______ 
 Balance at 28 February 2019              65,936   (22,195)     2,475     46,216 
                                          ______     ______    ______     ______ 
 
 Six months ended 28 February 
  2018 (unaudited) 
                                          Stated    Capital   Revenue 
                                         capital    reserve   reserve      Total 
                                 Notes   GBP'000    GBP'000   GBP'000    GBP'000 
 Balance at 31 August 2017                65,936   (11,846)     2,080     56,170 
 (Loss)/profit for the period                  -    (3,874)     1,169    (2,705) 
 Dividends paid                    6           -          -   (1,083)    (1,083) 
 Purchase of own shares for 
  cancellation                                 -      (784)         -      (784) 
                                          ______     ______    ______     ______ 
 Balance at 28 February 2018              65,936   (16,504)     2,166     51,598 
                                          ______     ______    ______     ______ 
 
 Year ended 31 August 2018 
  (audited) 
                                          Stated    Capital   Revenue 
                                         capital    reserve   reserve      Total 
                                 Notes   GBP'000    GBP'000   GBP'000    GBP'000 
 Balance at 31 August 2017                65,936   (11,846)     2,080     56,170 
 (Loss)/profit for the period                  -   (12,608)     2,313   (10,295) 
 Dividends paid                    6           -          -   (2,143)    (2,143) 
 Purchase of own shares for 
  treasury                                     -    (1,407)         -    (1,407) 
                                          ______     ______    ______     ______ 
 Balance at 31 August 2018                65,936   (25,861)     2,250     42,325 
                                          ______     ______    ______     ______ 
 
 The accompanying notes are an integral part of the financial 
  statements. 
 

Condensed Cash Flow Statement

 
                                                Six months    Six months   Year ended 
                                                     ended         ended 
                                               28 February   28 February    31 August 
                                                      2019          2018         2018 
                                               (unaudited)   (unaudited)    (audited) 
                                                   GBP'000       GBP'000      GBP'000 
 Operating activities 
 Dividend income                                       147           124          508 
 Fixed interest income                                 618           660        1,510 
 Income from Subsidiary                                497           565        1,190 
 Interest income                                         2             -            2 
 Investment management fee paid                      (256)         (295)        (522) 
 Other paid expenses                                 (185)         (271)        (508) 
                                                 _________     _________    _________ 
 Cash generated from operating activities 
  before finance costs and taxation                    823           783        2,180 
 
 Interest paid                                        (62)          (49)        (104) 
 Withholding taxes paid                               (11)           (8)         (42) 
                                                 _________     _________    _________ 
 Net cash inflow from operating activities             750           726        2,034 
 
 Cash flows from investing activities 
 Purchases of investments                          (3,055)       (6,386)      (7,853) 
 Proceeds from sales of investments                  3,787         6,063        8,483 
 Receipts from Subsidiary                              232           864          651 
                                                 _________     _________    _________ 
 Net cash inflow from investing activities             964           541        1,281 
                                                 _________     _________    _________ 
 Cash flows from financing activities 
 Equity dividends paid                             (1,047)       (1,083)      (2,143) 
 Repurchase of own shares                            (720)         (771)      (1,415) 
                                                 _________     _________    _________ 
 Net cash outflow from financing activities        (1,767)       (1,854)      (3,558) 
                                                 _________     _________    _________ 
 Net decrease in cash                                 (53)         (587)        (243) 
 Foreign exchange                                     (68)          (30)            1 
 Cash at start of period                               411           653          653 
                                                 _________     _________    _________ 
 Cash and cash equivalents at end of 
  period                                               290            36          411 
                                                 _________     _________    _________ 
 
 The accompanying notes are an integral part of the financial statements. 
 

Notes to the Financial Statements

For the six month period ended 28 February 2019

 
 1.   Principal activity 
      The Company is a closed-end investment company incorporated 
       in Jersey. Its Ordinary shares are traded on the London Stock 
       Exchange and are listed in the premium segment of the Financial 
       Conduct Authority's Official List. The Company's principal 
       activity is investing in Latin American securities. 
 
      The principal activity of its Delaware incorporated wholly 
       owned subsidiary, Aberdeen Latin American Income Fund LLC, 
       is similar in all relevant respects to that of its parent. 
 
 
 2.   Accounting policies - basis of preparation 
      The Half-Yearly Report has been prepared in accordance with 
       International Accounting Standards (IAS) 34 - 'Interim Financial 
       Reporting'. It has also been prepared using the same accounting 
       policies applied for the year ended 31 August 2018 financial 
       statements (which received an unqualified audit report), and 
       which were prepared in accordance with International Financial 
       Reporting Standards. 
 
      The financial statements have been prepared on a going concern 
       basis. In accordance with the Financial Reporting Council's 
       guidance on 'Going Concern and Liquidity Risk' the Directors 
       have undertaken a review of the Company's assets which primarily 
       consist of a diverse portfolio of listed equity shares, equity-related 
       investments and fixed income investments which, in most circumstances, 
       are realisable within a very short timescale. 
 
 
                                   Six months    Six months        Year 
                                        ended         ended       ended 
                                  28 February   28 February   31 August 
                                         2019          2018        2018 
 3.    Income from investments        GBP'000       GBP'000     GBP'000 
  Dividend income                         227           267         545 
  Fixed interest income                   803           735       1,409 
  Income from Subsidiary                  609           598       1,139 
                                    _________     _________   _________ 
                                        1,639         1,600       3,093 
                                    _________     _________   _________ 
       Other Income 
  Deposit interest                          2             -           2 
                                    _________     _________   _________ 
                                        1,641         1,600       3,095 
                                    _________     _________   _________ 
 
 
                                          Six months    Six months        Year 
                                               ended         ended       ended 
                                         28 February   28 February   31 August 
                                                2019          2018        2018 
 4.    Other operating expenses -            GBP'000       GBP'000     GBP'000 
        revenue 
  Directors' fees                                 44            38          82 
  Promotional activities                          12            20          41 
  Secretarial and administration 
   fees                                           36            59          96 
       Auditor's remuneration: 
  - fees payable for the audit 
   of the annual accounts                         16            15          32 
  Legal and advisory fees                         12            30          34 
  Custodian and overseas agents' 
   charges                                        28            36          69 
  Broker fees                                     15            15          30 
  Stock Exchange fees                             10             9          20 
  Registrar's fees                                12            13          22 
  Printing                                        12            12          18 
  Other                                           19            14          29 
                                           _________     _________   _________ 
                                                 216           261         473 
                                           _________     _________   _________ 
 
 
                                      Six months    Six months         Year 
                                           ended         ended        ended 
                                     28 February   28 February    31 August 
                                            2019          2018         2018 
 5.    Earnings per share                  pence         pence        pence 
       Ordinary share - basic 
  Revenue return                            2.13          1.89         3.78 
  Capital return                            7.36        (6.27)      (20.62) 
                                       _________     _________    _________ 
  Total return                              9.49        (4.38)      (16.84) 
                                       _________     _________    _________ 
       The figures above are based on the following: 
 
                                         GBP'000       GBP'000      GBP'000 
  Revenue return                           1,272         1,169        2,313 
  Capital return                           4,391       (3,874)     (12,608) 
                                       _________     _________    _________ 
  Total return                             5,663       (2,705)     (10,295) 
                                       _________     _________    _________ 
  Weighted average number of 
   Ordinary shares in issue           59,673,169    61,743,487   61,152,947 
                                       _________     _________    _________ 
 
 
                                           Six months    Six months        Year 
                                                ended         ended       ended 
                                          28 February   28 February   31 August 
                                                 2019          2018        2018 
 6.    Dividends on Ordinary shares           GBP'000       GBP'000     GBP'000 
       Distributions to equity holders 
        in the period: 
  Second interim dividend for 
   2018 - 0.875p                                    -             -         531 
  Third interim dividend for 
   2018 - 0.875p                                    -             -         529 
  Fourth interim dividend for 
   2018 - 0.875p (2017 - 0.875p)                  526           543         543 
  First interim dividend for 
   2019 - 0.875p (2018 - 0.875p)                  521           540         540 
                                            _________     _________   _________ 
                                                1,047         1,083       2,143 
                                            _________     _________   _________ 
 
 
 7.    Transaction costs 
       During the period expenses incurred in acquiring or disposing 
        of investments held at fair value though profit or loss have 
        been expensed through the capital column of the Condensed Statement 
        of Comprehensive Income, included within gains/(losses) on 
        financial assets held at fair value through profit or loss. 
        The total costs were as follows: 
 
                                  Six months           Six months             Year 
                                       ended                ended            ended 
                                 28 February          28 February        31 August 
                                        2019                 2018             2018 
                                     GBP'000              GBP'000          GBP'000 
  Purchases                                4                    3                5 
  Sales                                    4                    2                3 
                                   _________            _________        _________ 
                                           8                    5                8 
                                   _________            _________        _________ 
 
  The above transaction costs are calculated in line with the 
   AIC SORP. The transaction costs in the Company's Key Information 
   Document are calculated on a different basis and in line with 
   the PRIIPs regulations. 
 
 
 8.   Bank loan 
      The Company has a GBP8 million three year revolving multi-currency 
       facility with Scotiabank (Ireland) Designated Activity Company. 
       At the period end, GBP6,500,000 (28 February 2018 - GBP6,500,000; 
       31 August 2018 - GBP6,500,000) had been drawn down in Sterling 
       under the facility, fixed to 18 March 2019 at an all-in rate 
       of 1.804425% (28 February 2018 - 1.57031%; 31 August 2018 - 
       1.795250%). 
 
      At the date of this Report, GBP6,500,000 remains drawn down, 
       fixed to 17 May 2019 at an all-in rate of 1.807630%. 
 
 
                              28 February 2019       28 February 2018        31 August 2018 
 9.    Stated capital           Number   GBP'000       Number   GBP'000       Number   GBP'000 
       Issued and fully 
        paid 
  Ordinary shares 
   in issue                 59,085,324    65,936   61,085,324    65,936   60,175,324    65,936 
  Ordinary shares 
   held in Treasury          6,107,500         -    5,487,500         -    6,107,500         - 
                                          65,936                 65,936                 65,936 
 
  The Company's Ordinary shares have no par value. 
 
  During the period ended 28 February 2019, 1,090,000 (28 February 
   2018 - nil; 31 August 2018 290,000) Ordinary shares were bought 
   back at a total cost of GBP725,000 (28 February 2018 - nil; 
   31 August 2018 GBP188,000) including expenses, for cancellation. 
   No Ordinary shares (28 February 2018 - 1,052,500 Ordinary shares 
   at total cost of GBP784,000; 31 August 2018 - 1,672,500 Ordinary 
   shares at a total cost of GBP1,219,000) were bought back to 
   be held in treasury. At 28 February 2019 there were 6,107,500 
   (28 February 2018- 5,487,500; 31 August 2018 - 6,107,500) Ordinary 
   shares held in treasury, which represented 9.37% (28 February 
   2018 - 8.24%; 31 August 2018 - 9.21%) of the Company's total 
   issued share capital on those dates. 
 
  Following the period end a further 330,000 Ordinary shares 
   have been bought back and cancelled at a total cost of GBP223,000 
   resulting in there being 58,755,324 Ordinary shares in issue 
   and 6,107,500 Ordinary shares held for treasury at the date 
   this Report was approved. Ordinary shares that have been purchased 
   for treasury are available to be cancelled or sold at a later 
   date. 
 
 
 10.    Net asset value per share 
        The net asset value per Ordinary share and the net asset values 
         attributable to Ordinary shareholders at the period end calculated 
         in accordance with the Articles of Association were as follows: 
 
                                                  As at         As at        As at 
        Basic                               28 February   28 February    31 August 
                                                   2019          2018         2018 
  Net assets attributable to 
   Ordinary shareholders (GBP'000)               46,216        51,598       42,325 
  Number of Ordinary shares 
   in issue                                  59,085,324    61,085,324   60,175,324 
  Net asset value per Ordinary 
   share (p)                                      78.22         84.47        70.34 
 
 
 11.   Related party transactions and transactions with the Manager 
       The management fee is payable monthly in arrears based on an 
        annual amount of 1% of the net asset value of the Company valued 
        monthly. During the period GBP260,000 (28 February 2018 - GBP292,000; 
        31 August 2018 - GBP555,000) of management fees were payable, 
        of which GBP90,000 (28 February 2018 - GBP49,000; 31 August 
        2018 - GBP85,000) was outstanding at the period end. 
 
       During the period fees in respect of promotional activities 
        of GBP12,000 (28 February 2018 - GBP20,000; 31 August 2018 
        - GBP41,000) were payable with GBP9,000 (28 February 2018 - 
        GBP7,000; 31 August 2018 - GBP7,000) outstanding at the period 
        end. 
 
       The company secretarial and administration fee is based on 
        an annual amount of GBP122,000 (28 February 2018 - GBP118,000; 
        31 August 2018 - GBP118,000), increasing annually in line with 
        any increases in the UK Retail Price Index, payable quarterly 
        in arrears. During the period GBP36,000 (28 February 2018 - 
        GBP59,000; 31 August 2018 - GBP96,000) was payable after deduction 
        of a rebate of GBP25,000 (28 February 2018 - nil; 31 August 
        2018 - GBP22,000) to bring the OCR down to 2.0%, with GBP36,000 
        (28 February 2018 - GBP30,000; 31 August 2018 - 7,000) outstanding 
        at the period end. 
 
       The Manager has agreed to ensure that the Company's ongoing 
        charges ratio ("OCR") will not exceed 2.0% when calculated 
        annually as at 31 August. Until further notice, to the extent 
        that the OCR ever exceeds 2.0% the Manager will rebate part 
        of its fees in order to bring that ratio down to 2.0%. 
 
       The Company owns 100% of the share capital of the Subsidiary. 
        The Company receives income from the Subsidiary and there are 
        no significant restrictions on the transfer of funds to or 
        from the Subsidiary. During the period the Subsidiary transferred 
        GBP728,000 (28 February 2018 - GBP1,429,000; 31 August 2018 
        - GBP1,871,000) to the Company by way of income and capital 
        returns and at 28 February 2019 the amount due to the Company 
        by its Subsidiary was GBP14,572,000 (28 February 2018 - GBP15,712,000; 
        31 August 2018 - GBP15,300,000), which is a loan to the Subsidiary 
        and incorporated in the fair value of the investment in the 
        Subsidiary as at the period end. 
 
 
 12.   Half-Yearly Financial Report 
       The financial information for the six months ended 28 February 
        2019 and for the six months ended 28 February 2018 has not 
        been audited. 
 
       This Half-Yearly Financial Report was approved by the Board 
        on 26 April 2019. 
 

The Half-Yearly Financial Report will be available on the Company's website, www.latamincome.co.uk, and the Half-Yearly Report will be posted to shareholders in May 2019 and copies will be available from the Investment Manager.

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise. Investors may not get back the amount they originally invested

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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