Strong rise in Wisynco profit

Wisynco Group sent a strong message to investors, why the company’s stock is a must have by posting a strong 38 percent rise in profit for the 2019 March quarter, from revenues that grew 18.7 percent to $6.9 billion.
For the nine months to March, profits grew slower than for the quarter at 32 percent after tax, from revenues that are up 15 percent to $20.8 billion. The second quarter benefitted from the addition of rum and sugar distributions as well as improved efficiency flowing from the new bottling lines installed late in 2018 but suffered from foreign exchange losses of $69 million. Without the currency loss, profit in the quarter would be closer to an increase of 50 percent.
Asked how long the strong growth can continue, Managing director, William Mahfood informed IC, “I think it will be for the next couple years, based on the economy as well as our improved efficiencies.”
Profit before Taxation for the quarter increased to $791 million or 35.4 percent compared to $585 million in 2018 for the same quarter. For the quarter ended March 31, 2019, Profits Attributable to shareholders of $694 million or 19 cents per share compared to $504.3 million or 14 cents per share, an improvement of 37.6 percent over the corresponding period of the prior year.

Worthy Park sugar distributed by Wisynco & also Worthy Park Rum.

Gross Profit increased to $2.6 billion or 24.9 percent over the $2.1 billion achieved in the same in 2018 resulting in Gross Margin of 37.8 percent, greater than the 35.9 percent for the corresponding quarter of the previous year. For the half year Gross Profit also increased to $8 billion or 19 percent over the $6.7 billion achieved in the same quarter of the previous year resulting in Gross profit margin of 38.5 percent.
Selling, Distribution & Administrative Expenses for the quarter totaled $1.7 billion or 14.2 percent, more than the $1.5 billion for the corresponding quarter of the prior year. For the half year, cost incurred increased 16 percent to $5.2 billion. The six months increase is just ahead of revenue growth. Finance expenses included a loss of $69 million due to the revaluation of the Jamaican Dollar and pushed the cost in the quarter by 183 percent and 70 percent for the half year to $302 million. The company should benefit from the decline in the value of the local dollar subsequent to the close of the quarter as well as the distribution of JP Snacks’ products.
The group is in a healthy financial position. Current assets stood at $9.2 billion of which cash equivalent stood at $3.3 billion while current liabilities amounts to just $3.9 billion with shareholders’ equity $10.39 billion and borrowings amount to $1.25 billion.
IC is forecasting earnings of $1 per share for the year ending June and $1.50 for the 2020 fiscal year that starts in July. The stock trades at $14.90 on Friday and is up 36 percent for the year to date and trades at 15 times 2019 earnings and just 10 times 2020.

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