WISYNCO reports nine months net profit of $2.21 billion

Market News

May 7, 2021

May 07, 2021

Wisynco Group Limited for the nine months ended March 31, 2021, reported total revenue of $23.64 billion a 6% decrease when compared with the $25.19 billion reported for the same period in 2020. Total revenues for the quarter amounted to $7.60 billion reflecting a decrease of 6% over the $8.08 billion achieved in the corresponding quarter of the previous year. Management noted, “The surge in Covid cases during January and February and the Government of Jamaica implemented curfews resulted in business activities being slower than anticipated, although we did see stronger than expected March Revenues. Vaccinations have continued in earnest especially in the USA and the UK and we are seeing strong signs indicating a positive bounce-back in the Tourism industry and increases in the number of visitors who are expected to come to Jamaica in the months ahead. We have also seen some positive recovery in our Food Service business (inclusive of hotels and restaurants) which we expect to continue.”

The Company also noted, “The expansion of our production facilities over the years have given us the flexibility to increase capacity and during this quarter we recommenced production of Bigga for the UK market at Wisynco. Our growth in the UK for the Bigga brand has been very good and, in the past, we licensed the production of Bigga in the UK to ensure availability. We are proud to therefore bring this production back to Jamaica and look forward to continue growing the UK and all our other export markets. Exports were up 50% in Q3 and 28% for the year to date.”

Cost of sales for the nine months ended March 31, 2021 amounted to $15.51 billion, down 6% relative to $16.41 billion reported in 2020. Consequently, gross profit fell 7% to close at $8.13 billion compared to the $8.78 billion for the same period a year earlier. The Company noted, “Our Gross Margin at 34% was higher than the 32% in prior year and this was due primarily to better cost efficiencies which include our Cogeneration activities, as well as better than expected sales of our higher margin beverages in March.” Whereas, gross profit for the quarter amounted to $2.58 billion (2020: $2.59 billion).

Total expenses, for the nine months ended March 31, 2021, fell 11% to close at $5.61 billion (2020: $6.31 billion). Of total expenses, selling and distribution expenses declined 13% to total $4.58 billion (2020: $5.26 billion), while administrative expenses decreased 1% to $1.03 billion (2020: $1.04 billion). Total expenses for the third quarter fell 9% to $1.88 billion (2020: $2.07 billion).

Other operating income for the nine months increased 13% to $108.30 million (2020: $95.74 million). As such, WISYNCO booked a 2% increase in operating profit to $2.63 billion (2020: $2.57 billion). Whereas, for the quarter ended March 31, 2021, operating profit amounted to $733.42 million (2020: $549.40 million), a 33% increase.

Finance income nine months ended March 31, 2021 amounted to $184.95 million, down 13% from the $212.24 million reported for the corresponding period in 2020. Finance costs decreased 10% to $107.06 million for the period from $118.97 million for 2020.

Moreover, the Company reported Share of loss of associate of $27.55 million for the nine months ended March 31, 2021 relative to share of profit of associate of $6.01 million in the corresponding period of 2020.

Profit before taxation amounted to $2.68 billion, relative to $2.67 billion reported in 2020, a 1% increase year over year. Taxation for the period amounted to $465.29 million (2020: $492.74 million). Profit from continuing operation amounted to $2.21 billion relative to $2.17 billion booked for the comparable period in 2020. Profit from discontinued operations was $165.38 million for the nine months ended March 31, 2020 versus nil in 2021.

As such, net profit decreased 5% to $2.21 billion relative to $2.34 billion that was posted for the nine months ended March 31, 2020. Net profit for the third quarter amounted to $672.63 million relative to $580.30 million in 2020, a 16% increase year over year. Notably, total comprehensive income for the nine months ended March 31, 2021 amounted to $2.24 billion (2020: $2.38 billion). Whereas, total comprehensive income for the third quarter ended March 31, 2021 amounted to $675.95 million (2020: $604.16 million).

Net profit attributable to shareholders for the nine months totalled $2.21 billion (2020: $2.34 billion) while for the quarter net profit attributable to shareholders amounted to $672.63 million (2020: $580.30 million).

Earnings per share (EPS) for the quarter amounted to $0.18 (2020: $0.15), while the EPS for the nine months amounted to $0.59 (2020: $0.62). The twelve-month trailing EPS amounted to $0.71. The number of shares used in our calculations is 3,750,000,000. Notably, WISYNCO’s stock price closed the trading period on May 06, 2021 at $15.78 with a corresponding P/E of 22.09 times.

Management noted, “We continue our review of investments for expansion and for cost-effective technologies to improve our costs of operations.”

Balance Sheet at a Glance:

As March 31, 2021, WISYNCO’s assets totalled $20.66 billion, 7% more than the $19.38 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 58% or $2.54 billion to close at $6.90 billion (2020: $4.35 billion).

Shareholder’s equity closed at $14.90 billion (2020: $12.79 billion). As such, the book value per share was $3.97 (2020: $3.41).

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