August 31, 2020
Wisynco Group Limited for the year ended June 30, 2020, reported total revenue of $32.17 billion a 19% increase when compared with the $26.94 billion reported in 2019. Total revenues for the quarter amounted to $6.98 billion reflecting an decrease of 3% over the $7.19 billion achieved in the corresponding quarter of the previous year. Management noted, “The final quarter, due to the COVID-19 global pandemic, represented a challenging quarter. Wisynco services all sales channels in Jamaica however Covid impacted and slowed activities in all areas, especially in Food Service (Tourism and Restaurants), Bars and Entertainment, and Schools. Revenues for the 9 months ended March 31, 2020 were growing at an average rate of 27.5% for the fiscal year however, due to Covid, the growth rate dropped significantly, as expected, in the final quarter resulting in an overall growth rate of 19.4% for the year.”
Cost of sales for the year amounted to $21.10 billion, up 25% relative to $16.87 billion reported in 2019. Consequently, gross profit rose 10% to close at $11.07 billion compared to the $10.07 billion a year earlier. The Company noted, “Our Gross Margin ratio was impacted by the increased volume of lower margin products being sold in Fiscal 2020, along with the margin being weighed down by reduced Revenues of higher margin products in the final quarter.” Whereas, gross profit for the quarter amounted to $2.29 billion (2019: $2.35 billion).
Total expenses, for the twelve months ended June 30, 2020, rose 13% to close at $8.16 billion (2019: $7.22 billion). Of total expenses, selling and distribution expenses climbed 11% to total $6.78 billion (2019: $6.12 billion), while administrative expenses increased 25% to $1.37 billion (2019: $1.10 billion). Management noted, “Management has paid close attention to expenses during the year and especially so in the final quarter. Our expense to sales ratio for the year improved from 26.8% last year to 25.3% this year. Management is optimistic that the expense to sales ratio will continue to decline in the future whilst they continue to drive the growth in Revenue.”
Other income for the year decreased 51% to $142.65 million (2019: $288.66 million). As such, WISYNCO booked a 3% decline in operating profit to $3.05 billion (2019: $3.14 billion). Whereas, for the quarter ended June 30, 2020, operating profit amounted to $488.62 million (2019: $537.35 million), a 9% decrease year over year.
Finance income amounted to $320.50 million, up 169% from the $119.22 million reported in 2019. Finance costs decreased 32% to $155.84 million for the year from $230.21 million for 2019. The Company noted, “Included in Finance income are foreign exchange gains for the year of approximately $182 million as a result of the devaluation of the JAD year over year.” Moreover, the Company reported ‘Share of results of associate’ of $984,000 for the year (2019: 7.79 million).
Profit before taxation amounted to $3.22 billion, relative to $3.03 billion reported in 2019, a 6% increase year over year. Taxation for the period amounted to $557.57 million (2019: $491.72 million). Profit from continuing operation amounted to $2.66 billion relative to $2.54 billion booked for the comparable period in 2019. The Company booked a 64% decrease in profit from discontinued operations from $387.16 million to $139.74 million for the year ended June 30, 2020.
As such, net profit decreased 4% to $2.80 billion relative to $2.93 billion posted in 2019. Net profit for the fourth quarter amounted to $460.51 million relative to $691.04 million in 2019. Notably, total comprehensive income for the year amounted to $2.84 billion (2019: $2.94 billion).
Earnings per share (EPS) for the quarter amounted to $0.12 (2019: $0.18), while the EPS for the year end amounted to $0.76 (2019: $0.78). The number of shares used in our calculations is 3,750,000,000. Notably, WISYNCO’s stock price closed the trading period on August 28, 2020 at $16.33.
Management noted, “Our Cogen operations had commissioning challenges during the quarter due to the supplier engineers not being able to arrive in Jamaica because of travel restrictions arising from Covid, however, we were able to work virtually with the suppliers to get the engine commissioned. We have been running at approximately 75% capacity from our startup date of July 16, 2020 and are confident that improved savings from this investment will accrue to the company in the future. Subsequent to June 30, 2020 we were able to refinance our investment in the CoGen plant under a new competitively priced $500 million financing arrangement.”
Balance Sheet at a Glance:
As June 30, 2020, WISYNCO’s assets totalled $19.28 billion, 8% more than the $17.78 billion recorded last year for the same period. The increase in total assets was largely due to an increase in ‘Cash and Short term deposits’ which rose 25% or $976.20 million to close at $4.95 billion (2019: $3.97 billion).
Shareholder’s equity closed at $12.97 billion (2019: $11.09 billion). As such, the book value per share was $3.46 (2019: $2.96).
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