November 09, 2020
Wisynco Group Limited (WISYNCO) reported total revenue of $8.07 billion for the first quarter ended September 30, 2020, a 6% decrease when compared with the $8.58 billion reported for the same period in 2019. Management noted, “We did see some pockets of improvement and were pleased that our exports rose 43% or approximately $56 million over the comparative quarter last year. We attribute this increase to higher demand in the US, Canada and other CARICOM countries for our brands and we continue to press the development of our exports as a means of getting exposure to new Revenue channels.”
Cost of sales for the period amounted to $5.17 billion, down 6% relative to $5.51 billion reported in last year. Consequently, gross profit fell 6% to close at $2.90 billion compared to the $3.08 billion for the same period a year earlier.
In addition, Other Income increased 75% to close the period at $42.88 million versus $24.57 million in 2019.
Total expenses for the three months decreased 6% to close at $1.92 billion (2019: $2.04 billion). Of total expenses, selling and distribution expenses fell 8% to total $1.56 billion (2019: $1.71 billion), while administrative expenses increased 6% to $354.05 million (2019: $333.60 million). Furthermore, Wisynco highlighted, “Management continues to implement measures to reduce expenses and were pleased that our expense to sales ratio held at 23.8% of sales even though our Revenue base was lower than the prior year’s quarter. We are hopeful that the expense control measures will be more evident in future quarters.”
As such, WISYNCO booked a 4% decrease in operating profit to $1.02 billion when compared to $1.06 billion in the previous corresponding period.
Finance income for the period amounted to $48.90 million, down 58% from the $116.59 million reported for the corresponding period in 2019, while finance costs increased 10% to $43.63 million for the period from $39.85 million for 2019.
Profit before taxation amounted to $1.03 billion, relative to $1.15 billion reported in 2019, an 11% decline year over year. Taxation for the period amounted to $176.80 million (2019: $216.53 million). Profit after taxation amounted to $851.24 million in the first quarter ended September 30, 2020 relative to $1.18 billion in 2019 due to profit from discontinued operations of $242.79 million booked in 2019 versus nil in 2020.
Wisynco also noted, “the improvement in Gross margins coupled with the reduced expense to sales ratio saw a widening of our Net profit after tax margin to 12.9% or 1.5% greater than the 11.4% from the first quarter of 2020.”
Net profit attributable to shareholders of $851.24 million (2019: $1.18 billion) was posted for the first quarter, representing a 28% decrease year over year.
Total comprehensive income for the first quarter amounted to $871.06 million (2019: $1.20 billion).
Earnings per share (EPS) for the quarter amounted to $0.23 (2019: $0.31), while the EPS for the twelve-month trailing EPS amounted to $0.66. The number of shares used in our calculations is 3,750,000,000. Notably, WISYNCO’s stock price closed the trading period on November 06, 2020 at $14.94.
Notably Wisynco added, “Our Balance Sheet remains strong and management is actively reviewing new investments to drive down our costs of operations and to seek new Revenues. The company received a new long-term loan of $500 million during July 2020, at a very attractive interest rate and tenure, to refinance the capital outlay on the Cogeneration plant. Our Cogeneration plant was successfully commissioned and placed into production in July 2020 (this quarter) and the company has seen positive contribution from the implementation through reduced energy costs.”
Balance Sheet at a Glance:
As September 30, 2020, WISYNCO’s assets totalled $21.09 billion, $1.66 billion more than the $19.43 billion recorded last year for the same period. The increase in total assets was largely due to increases in ‘Cash and short term deposits’ by $1.57 billion to close at $6.57 billion (2019: $5 billion). ‘Property, Plant and Equipment’ also increased 9% to $7.13 billion (2019: $6.55 billion)
Shareholder’s equity closed at $13.87 billion (2019: $11.91 billion). As such, the book value per share was $3.70 (2019: $3.18).
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