JETCON reports 85% decrease in six months net profit

August 17, 2020

JETCON for the six months ended June 30, 2020 reported total turnover of $313.73 million, 33% less than the $467.17 million reported for the corresponding period in 2019. Jetcon noted, “After a challenging 2019 financial year, your company started off 202) with some positive signs that suggested the year would show encouraging improvement on the 2019 out-turn for the first two months of the year. Sales dipped sharply in March, with the dislocation caused by shut down of many businesses as well as curfews that were implemented. The measures along with the COVID-19 pandemic resulted in a sharp fall in sales in the second quarter. Management took action to curtail cost in the period, the effects of which is reflected in the financial report for the second quarter.” Turnover for the second quarter fell 61% to $85.97 million compared to $221.10 million in 2019.

Management noted, “The Second quarter, during the early peak of the COVID-19 outbreak was a challenging period for Jetcon, as with most businesses. High levels of uncertainty, societal movement restrictions, and general unease meant that purchasing cars was not high on the list of people’s priorities. As time went on and restrictions began to ease, we have seen sales recover.”

Cost of Sales for the period decreased 32% to $262.99 million (2019: $386.80 million), As such, Gross Profit for the period decreased by 37% to $50.74 million compared to $80.37 million in 2019. Gross profit for the quarter amounted to $14.11 million relative to $36.39 million book for the same quarter of 2019.

JETCON indicated, “As of early August, we are back to roughly 60% of our normal level of sales, and we expect that to continue rising over the next few months towards normality. All our staff have returned to work, having furloughed some at the end of April. We have enacted new marketing strategies in a bid to increase sales, and those strategies seem to be bearing fruit.”

Total Expenses for the period decreased by 16% to $47.20 million (2019: $56.48 million). Of this, Selling and Marketing Expenses for the period decreased to $10.97 million (2019: $12.01 million), while Administrative and Other Expenses recorded a decrease of 23%, closing at $26.69 million (2019: $34.88 million). Finance costs closed the period at $2.08 million a 427% increase when compared to the $394,147 booked in the prior year. Other operating cost for the six months period closed $7.47 million relative to $9.19 million booked for the corresponding period  2019.

Consequently, Profit Before Taxation amounted to $3.51 million relative to $23.89 million in 2019, representing an 85% decrease year-on-year for the period.

There were no taxation charges for the period as such, net profit for the period amounted to $3.51 million relative to $23.89 million. While, net loss for the quarter amounted to $6.77 million compared to a profit of $8.67 million for the same quarter in 2019.

As such, the earnings-per-share for the period amounted to $0.006 relative to $0.041 last year. Loss-per-share for the quarter amounted to $0.012 in contrast to an earnings per share of $0.015. The twelve months EPS is 0.07 where the number of shares used in our calculation is 583,500,000. JETCON’s last traded price as at August 14, 2019, was $0.89.

Balance Sheet Highlights:

The company, as at June 30, 2020 recorded total assets of  $652.17 million, a decrease of 1% when compared to $660.32 million recorded last year. This decline was primarily attributable to the 13% and 51% fall in ‘Inventories’ and ‘Cash and Bank Balances’ respectively to total $456.21 million (2019: $524.56 million) and $2.58 million (2018: $5.30 million) respectively. According to the Company, “Management took the decision to halt purchases of additional inventories in March resulting in amounts tied up in inventory declining compared to the same period in 2019.”

Total Stockholders’ Equity as at June 30, 2020, closed at $550.85 million, compared to $528.44 million for the corresponding period last year. This resulted in a book value per share of $0.94 per share compared to $0.91 as at June 30, 2019.



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