Wigton Windfarm delivered a 19.5 percent increase in net profit of $793 million for the year to March 2021, up from $663 million generated in 2020 from Sale revenues that rose 7.2 percent to $2.59 billion in the year to March 2021 from $2.4 billion in 2020.
Wigton traded 65 cents of shares on Wednesday.
This is the second year in a row that the profit is rising, following a 30 percent increase in the 2020 fiscal year over that of 2019.
Other income contributed $218 million to profit up from $221 million in 2020 and incurred direct costs of $789 million for the year against $764 million in 2020. General administrative expenses amounted to $491 million for the year against $479 million in 2020, while finance charges amount to $503 million compared to $527 million in 2020. Taxation ate up 4234 million, up from $206 million in 2020.
The company generated a positive cash flow of $1.6 billion repaid loans to the tune of $710 million and paid out a mere $28 million in dividend.
Wigton ended the year with cash of $3.2 billion and is a part of the total current assets of $3.7 billion but there was only $117 million in current liabilities but the company borrows $5.6 billion and has shareholders’ equity of $4.2 billion.
The company earned seven cents per share, with 202 coming in at six cents. With the stock selling at 65 cents on the Main Market of the Jamaica Stock Exchange, it appears cheap, but investors have to consider that the company had indicated that the rate collected on one of the turbines will fall sharply from what would have been received for the 2021 fiscal year, as such the reduction is going to have a major negative impact on revenues and profit going forward.
Here is what the audited accounts stated “Wigton Phase II which was commissioned in December 2010 and supplies 18MW power to the grid. The plant was awarded the avoided rate for the energy it supplies and as per the terms and conditions of the Power Purchase Agreement (PPA), the final rate adjustment for this plant was applied at the end of March 2021. The rate adjustment will translate to approximately fifty percent reduction in the revenue from Wigton Phase II in United States Dollars. This is projected to equate to an overall fourteen percent decrease in revenue in Jamaican Dollars.
The effect of the rate adjustment will reduce revenues by approximately $380 million before tax and will result in net profit coming in around $470 million of 4.3 cents per share for the 2021/22 fiscal year and that would put the value of the stock around at the latest price of 65 cents at a PE of 15.”
