WISYNCO reports 11% increase in first quarter total comprehensive income

Date: November 9, 2018

Wisynco Group Limited (WISYNCO) reported total revenue of $6.81 billion for the first quarter ended September 30, 2018, a 12% or $728.69 million increase when compared with the $6.08 billion reported for the same period in 2017.

Cost of sales for the period amounted to $4.23 billion, up 13% relative to $3.75 billion reported in last year. Consequently, gross profit rose 10% to close at $2.58 billion compared to the $2.33 billion for the same period a year earlier. WISYNCO noted, “Gross Margin of 37.8% was slightly lower than the 38.4% for the corresponding quarter of the previous year due to the commissioning of the new beverage lines and the devaluation of the Jamaican Dollar.”

In addition, Other Income increased 40% to close the period at $21.90 million versus $15.70 million in 2017.

Total expenses for the three months rose 11% to close at $1.73 billion (2017: $1.55 billion). Of total expenses, selling and distribution expenses climbed 12% to total $1.47 billion (2017: $1.32 billion), while administrative expenses increased 11% to $259.17 million (2017: $234.24 million). According to WISYNCO, “Our cold storage is now complete and we successfully transitioned from all leased facilities into our central cold storage distribution facility located at our Lakes Pen Compound. We expect synergies and efficiencies from this successful transition.”

As such, WISYNCO booked a 9% increase in operating profit to $868.69 million when compared to $795.98 million in the previous corresponding period.

Finance income for the period amounted to $107.23 million, up 89% from the $56.75 million reported for the corresponding period in 2017, while finance costs decreased 5% to $47.85 million for the period from $50.58 million for 2017.

Profit before taxation amounted to $928.07 million, relative to $802.14 million reported in 2017, a 16% uptick year over year. Taxation for the period amounted to $159.41 million (2017: $137.54 million). Wisynco recorded nil for profit from continuing operations relative to $33.35 million in 2017, as such, net profit totalled $768.66 million relative to $697.96 million in 2017.

Total Comprehensive Income of $778.83 million (2017: $699.25 million) was posted for the first quarter, representing a 11% increase year over year.

Earnings per share (EPS) for the quarter amounted to $0.20 (2017: $0.19), while the EPS for the twelve-month trailing EPS amounted to $0.64. The number of shares used in our calculations is 3,750,000,000. Notably, WISYNCO’s stock price closed the trading period on November 8, 2018 at $10.40.

The company added, “Wisynco has been appointed as the local distributor for sugar and spirits, produced locally by Worthy Park Estates Limited. This initiative furthers our focus on agro-processing and Jamaican-manufactured goods. We believe this will be a great opportunity for our company, given the many innovations taking place in the agro-processing sector, as well as the synergies to be gained between the companies. The Government of Jamaica has announced a ban on Styrofoam produced in Jamaica to take effect January 1, 2020. We continue to work assiduously to innovate products that are environmentally friendly however if we are unable to develop these products then we will repurpose our team members and building to ensure any lost revenues as a result of the ban will be recouped through new business.

In addition, “In keeping with the Ministry of Health’s decision to remove all beverages containing six grams or more of added sugar per 100 milliliters of beverage from schools starting January 1, 2019, the Company recently announced that prior to the implementation of this decision we would early adopt and cease offering our beverages falling within this category to all schools effective November 1, 2018. This has been implemented. Wisynco continues to be mindful of the need for healthier beverage and lower sugar alternatives and our research and development teams are working to identify these.”

Balance Sheet at a Glance:

As March 31 2018, WISYNCO’s assets totalled $16.25 billion, $3.38 billion more than the $12.87 billion recorded last year for the same period. The increase in total assets was largely due to increases in ‘property, plant and equipment’ by $1.91 billion to close at $6.80 billion (2017: $4.89 billion).

Shareholder’s equity closed at $9.19 billion (2017: $7.25 billion). As such, the book value per share was $2.45 (2017: $1.93).

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