GWEST reports six month net loss of $42.21 million

November 15, 2019

GWEST Corporation Limited (GWEST), for the six months ended September 2019 reported revenue of $68.91 million, an increase of 20%, when compared with the $57.21 million booked last year. Revenue for the quarter totalled $35.44 million up 12% year over year (2018: $31.72 million).

Cost of sales fell 11% to total $18.46 million relative to the $20.72 million reported for the same period last year. GWEST highlighted that “the increase in cost of sales for the quarter is as a result of the timing differences in the accrual medical expenses, which we expect to level out in the coming quarter.” As such gross profits increased by 38% to a total of $50.45 million in 2019 relative to the $36.49 million for the corresponding period in 2018. Gross profit for the quarter amounted to $23.04 million (2018: $22.88 million).

Administrative expenses closed the period at $68.33 million versus $95.57 million in the previous corresponding period, while other operating expenses declined to $406,000 (2018: $1.61 million). The Company noted that the reduction was due to , “ a targeted strategy implemented early in the financial year to restructure our organization and to rationalize our human resources. This being done on an ongoing basis with an aim to achieve further reduction in our operating expenses.”

In addition, other gains were reported at $174,000 compared to losses of $477,000 in 2018. Finance cost increased for the period by $6.77 million to total $24.12 million (2018: $17.35 million). GWEST highlighted that this was due to, “ an adoption of IFRS 16 effective for periods beginning on or after January 1, 2019. IFRS 16 replaces the lease standard IAS 17, which previously recognized operating leases in rent/ lease expenses. Adoption of IFRS 16 resulted in an increase in our assets through recognizing our long-term leases as assets, and increased our financial liabilities resulting in an increase in our finance charges.”

As a result, GWEST reported loss before taxation of $42.21 million relative to the $78.51 million reported in 2018. Pretax loss for the second quarter totalled $21.45 million versus a loss of $34.32 million booked for the comparable quarter of 2018.

No taxes were charged resulting in a net loss for the period of $42.21 million (2018: $78.51 million).

Loss per share (LPS) for the quarter amounted $0.044 (LPS: 2018: $0.071). LPS for the six month period totalled $0.087 relative to an LPS of $0.162 in 2018. The trailing twelve-month LPS amounted to $0.205. The number of shares used in the calculations is 484,848,485. GWEST last traded on November 14, 2019 at $1.00.

The company added, “our outlook for the coming quarter remain positive especially in the area of real estate rentals, as our prime location has resulted in greater visitor traffic throughout our medical facilities. This has resulted in increased enquiries about rental space and we expect to see a material growth in the occupancy level in the upcoming periods.”

Balance Sheet at a glance:

As at September 30, 2019, total assets amounted to $1.71 billion, 7% more than $1.60 billion the year prior. ‘Property and equipment’ contributed to the increase in the asset base, growing by $110. 8 million to total $505.14 million (2018: $394.34 million). This increase was offset by a 2% decline in ‘Investment Property’ and a 42% decline in ‘Short term deposits’ to total $894.18 million (2018: $915.60 million) and $42.16 million (2018: $72.30 million) respectively.  The Company noted, “this slight reduction in our investment property was due to the sale of a small office during the period.”

Shareholders’ Equity totalled $673.34 million (2018: $778.12 million) resulting in a book value per share of $1.39 (2018: $1.60).

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