JETCON reports 40% decrease in year end net profits

Date: March 4, 2019

Jetcon Corporation Limited (JETCON), for the twelve months December 31, 2018 reported turnover for the twelve months fell by 1% to $1.16 billion (2017: $1.18 million) while for the fourth quarter revenues dipped to $269.19 million in 2018 from $290.04 million in 2017.

Cost of sales also increased by 5% to $999.17 million (2017: $954.89 million) and as a result gross profit decreased by 27% to $162.30 million compared to $221.70 million in 2017.

Total Expenses increased by 3% to $71.29 million (2017: $69.45 million). Selling and marketing expenses increased to $23.57 million (2017: $22.71 million) while administrative and other expenses recorded an increase of 1%, closing at $44.95 million (2017: $44.47 million). Finance costs closed the period at $2.78 million, a 22% reduction when compared to the prior year.

Consequently, profit before taxation amounted to $91.94 million relative to $153.84 million in 2017 representing a 40% decrease year-on-year for the period.

Tax charges for the period was $60,000 unchanged from 2017’s taxes.

As a result, net profit for the period amounted to $91.94 million relative to $153.79 million. For the fourth quarter net losses of $2.29 million were recorded versus profits of $25.09 million in last year.

Total comprehensive income amounted to $91.94 million (2017: $153.82 million).

As such, the earnings-per-share for the year amounted to $0.16 relative to $0.26 last year. Loss per share for the quarter totaled $0.004 (EPS:2017: $0.04). The number of shares used in our calculation is 583,500,000. JETCON’s last traded price as at March 1, 2019, was $3.34.

JETCON noted, “The company took decisive steps to move to a higher level going forward by investing in new facilities to accommodate expansion of sales. The impact is that we expanded staffing and increased spending on leasing property at Kingston Wharves at their new Tinson Pen facility that will allow us to expand sales beyond our past capacity going forward. Jetcon is one of only two car dealers granted the privilege of use of the facility, and the only pre-owned dealer with this access. Adjustments in importation strategy were implemented when the Pre-Inspection practices were introduced by Government, we also changed in the method of transporting vehicles into the island resulted in higher pre-delivery costs and a reduction in profit margin.”

According to management, “Orders for vehicles climbed sharply in December and continued into the New Year. January sales were 30 percent down compared to 2018, however this has closed to 12 percent at the end of February with sales in February being up moderately above the same month in 2018. The year saw us increasing focus on servicing of vehicles. Service income increased by 128 percent over 2017 for the year, more importantly, for 2019 to date growth is 285 percent over the similar period in 2018. Jetcon will begin its push into wholesaling of units to other dealers, and early indications show promising results. Sales for February 2019, is 10 percent up on 2018 and 9 percent up on January 2019.”

Balance Sheet Highlights:

The company, as at December 31, 2018, recorded total assets of $562.86 million, an increase of 5% when compared to $537.79 million recorded last year.

Total Stockholders’ Equity as at December 31, 2018, closed at $504.55 million (2017: $433.03 million) resulting in a book value per share of $0.86 per share compared to $0.74.

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