June 26, 2019
Jetcon Corporation Limited (JETCON) held its Annual General Meeting today, June 25, 2019, at Knutsford Court Hotel. Opening remarks were made by the Chairman, Mr. John Jackson. He highlighted that the last financial year saw a downturn in profits which were attributable to a number of factors. Notably, in the start of 2018, there was a pre-inspection in Japan due to tampering of speedometers and passing the old cars off as new. Subsequently, JETCON had to adjust prices in order to move vehicles from inventory.
Mr. John Jackson also suggested that based on the trend from 2010 to present, it seems that there is usually 3 years of boom in the market followed by 2 years of leanness. He further suggested that sales tend to follow the pattern of imports. Nevertheless, “though the motor industry saw a 32% decline in imports, JETCON has stayed predominately above the industry’s doings.” According to Mr. John Jackson, based on the interim financial statements for the first quarter of 2019, there will be a possible reduction in profit and sales for the second quarter. He believes that “the road work has had an impact on the sale of motor vehicles and demand for vehicles”. In addition, mortgage lending has increased while motor vehicle lending has decreased with the new requirement stipulated by banks making it harder to acquire loans. Nonetheless, there are other sources of financing such as purchasing stocks that potential customers can undertake.
Managing Director, Mr. Andrew Jackson, outlined their strategies:
- Improvement in marketing strategy to digital marketing (social media)
- Target customers of the middle to lower class earners which constitutes most of the market.
- Improve the quality delivery of their staff.
The 2018 deliverables were as follows:
- Investment in leasing storage space as a client inside the Special Economic Zone(SEZ) in order to store the cars and use of the additional space to lay the framework for the company to distribute into the local market or engage in re-exportation to the Caribbean region. However, research has not been positive. The rest of the Caribbean are also facing serious challenges with respect to foreign exchange rates.
- Government granted licenses which were required for the procurement of a Pre-shipment Certificate
The JETCON recorded revenues of $1.16 billion for FY2018, a 1.3% decrease from $1.18 billion in 2017. Expenses for FY2018 rose by 3% to $71 million from $69 million in FY2017 attributable to the implementation of the IFRS 9 as well as leasing space inside the Special Economic Zone (SEZ). Net Profit for FY2018 fell by 40% to $92 million when compared to $154 million in FY2017.
JETCON outlined the following prospects for the near future:
- In the short-term, the primary driver for increased earnings will be vehicle unit sales growth and increased revenues from vehicle servicing and sale of parts.
- Costs as it relates to Pre-shipment regime are expected to be reduced in the coming months as they make provisions to their pre-delivery preparation strategy.
- Despite the recent downfalls, management are optimistic that economic growth in 2020/2021 will be more robust.
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