GWEST reports six month net loss of $78.52 million

Date: November 14, 2018

GWEST Corporation Limited (GWEST), For the six months ended September 2018 Revenue amounted to $57.21 million, an increase of 43%, when compared with the $39.88 million booked last year. According to the company, “Our revenue growth has been significantly affected by our inability to accept health insurance due to the delay in the accreditation of our Urgent Care and Laboratory facilities. This has impacted our Urgent Care and Lab services significantly as up to 70% of revenues for are projected to come from the use of health insurances. We continue to have dialogue with the ministry in getting this long-delayed inspection done and hope that in the next quarter we will achieve this milestone.” Revenue for the quarter totalled $31.72 million up 49% year over year (2017: $21.33 million).

Cost of sales soared 182% to total $20.72 million relative to the $7.35 million reported for the same period last year. As such gross profits increased by 12% or $3.96 million to a total of $36.49 million in 2018 relative to the $32.53 million for the corresponding period in 2017. GWEST highlighted that “is as a result of the expanded 24-hour service opening time of our facility. Gross profit for the quarter amounted to $22.88 million, an increase of 35% relative to the $16.92 million reported for the second quarter of 2017.

Administrative expenses closed the period at $95.57 million versus $37.87 million in the previous corresponding period, while other operating expenses surged to $1.61 million (2017: $497,000).

In addition, other losses were reported at $477,000 compared to gains of $1.04 million in 2017. Finance cost recorded $5.84 million decrease to total $17.35 million (2017: $23.19 million).

As a result, GWEST reported operating loss of $78.51 million relative to the $27.94 million reported in 2017. The operating loss for the second quarter totalled $34.32 million versus a loss of $13.63 million booked for the comparable quarter of 2017.

No taxes were charged resulting in a net loss for the period of $78.51 million when compared to losses of $27.94 million in 2017, Notably, net loss for the quarter amounted to $34.32 million relative to a loss of $13.63 million for the same quarter of 20117.

Loss per share (LPS) for the quarter amounted $0.071 (LPS: 2017: $0.028). LPS for the six month period totalled $0.16 relative to an LPS of $0.06 in 2017. The trailing twelve-month LPS amounted to $0.29. The number of shares used in the calculations is 484,848,485. GWEST last traded on November 14, 2018 at $1.90.

The company added, “We expect revenue to continue trending upward to match our increase expenses as the market continues to access our 24-hour facility. This facility is expected to increase its potential in the upcoming winter tourist season where the demand for this type of 24-hour service is expected to increase during this period.”

The outlook for the forthcoming quarter looks positive as our discussions with hotels and BPO companies have resulted in signed contracts as their dedicated medical services provider. We have also increased the Lab footprint by establishing blood draw stations in high traffic locations. We have also contracted the services of a paediatrician to enhance our service offerings and have extended our opening hours in the General Practice to accommodate early morning and late evening patients.

Our open house held to showcase vacant spaces for lease and sale has yielded positive results which should see an increase in lease spaces and sales completed in the final quarter. The build out of our surgery centre is projected to start in the next quarter and be completed within the next nine months which would allow us to have a full complement of service offerings. The management and Board will continue to pursue a strategy of steady growth while increasing our efficiency and we remain committed to increasing our shareholders value.

Balance Sheet at a glance:

As at September 30, 2018, total assets amounted to $1.59 billion, 6% more than $1.50 billion the year prior. ‘Property and equipment’ and ‘short term deposits’ both contributed to the increase in the asset base, totalling $394.34 million (2017: $363.09 million) and $72.30 million (2017: $42 million) respectively.

Shareholders’ Equity totalled $778.12 million (2017: $287.68 million) resulting in a book value per share of $1.60 (2017: $0.59).

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