Profit climbs 24% in Q2 at Wisynco

February 6, 2022 by

Revenues at Wisynco Group jumped 19 percent for the quarter to December to $9.5 billion above the $8 billion for the similar quarter of the previous year while for the half year revenues were up 17 percent to $18.7 billion from $16 billion in 2020.

Wisynco traded at $20 on Friday after the posting of results.

“We have seen a continued recovery in our Revenues with all Channels increasing at vibrant levels. Exports as well for the quarter were up 103 percent over the same quarter of the prior year. Our increased efforts and focus have resulted in improved results in this area and we have noticed wider consumer acceptance for our products in these important export markets.” William Mahfood, Chairman and Andrew Mahfood, Chief Executive Officer stated in their joint report to shareholders. “Exports have moved from 3 percent of overall sales to 5 percent,” the chairman informed ICInsider.com.
Gross Profit climbed 24.3 percent for the quarter to $3.3 billion from $2.7 billion in the same quarter of the previous year while it grew 18.6 percent from $5.6 billion to $6.6 billion. Improvement in gross margin from 33.3 percent for the 2020 December quarter to 34.8 percent helped to swell the gross profit and helped to drive net profit for the quarter as well as a smaller rise in margins from 34.6 percent to 35.2 percent contributed to improved numbers for the half year and bodes well for the second half. Selling, Distribution expenses grew at a slower pace than sales revenues at 17.6 percent to $1.74 billion for the quarter and 11.4 percent for the six months to $3.39 billion from $3 billion in 2020. Administrative expenses for the quarter rose by 6 percent to $357 million from $337 million in 2020 and for the year to date, they rose 6.4 percent from $691 million to $735 million in the prior year.

Wata is one of Wisynco best-known brands

Profit before Taxation surged 84.6 percent for the quarter to $1.5 billion, over the $836 million in the comparative quarter for the prior year and includes an exchange gain of $280 million compared to an exchange loss of $26 million for the 2020 quarter. Profit before taxation for the half year jumped 51.6 percent to $2.8 billion compared to $1.9 billion in the prior year.
After provision for taxes, Wisynco recorded net profits attributable to stockholders of $1.2 billion, or 31c per share for the quarter, 74 percent greater than the $688 million earned for the prior year and the six months net profit rose from $1.54 billion to $2.13 billion, with 57 cents in earnings per share.
Cash inflows from operations were $2.9 billion, up from $2.45 billion in 2020.
Shareholders’ Equity stood at $17 billion, with borrowings at $1.9 billion. Current Assets ended the quarter at $16 billion up from $13 billion the previous year and Current Liabilities stood at $5.6 billion compared to $4.6 billion at the end of 2020. Cash funds and short term investments ended the period at $9.6 billion up from $6.9 billion in 2020, Mahfood points to this amount and suggests that it is not contributing much to profits. The conclusion is that the company will be on the watch for viable acquisitions to provide a better rate of return.

True Juice orange juice bottled and distributed by Wisynco.

The board declared an interim dividend of 20c per share, up from the 10 cents per share interim dividend declared in January 2021. The dividend will be paid on March 1, to shareholders on record on February 15. The stock trades ex-dividend February 14, 2022.
“We started to see a better turnaround in the operations from the middle of last year,” William Mahfood advised ICInsider.com. He felt that improved service to customers and increased attention paid to the cost were contributing factors as well. Mahfood indicated that January was a strong month for the group and hopes that it will carry through for the rest of the quarter. Although only around 10 percent of revenues go directly into the hotel sector, there is evidence of a strong rebound in tourism in the sector that is contributing to the resurgence in sales.
ICInsider.com projection is for earnings of $1.30 for the current year ending in June and $1.75 for the next fiscal year. The stock climbed from $17.75 before the release of the results after the market closed on Thursday to $20 at the close on Friday for a PE ratio of 15 and 11 times next year’s earnings.

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Wisynco expects better Q2

December 2, 2018 by

Wisynco held its AGM on Tuesday, November 26, at the Sam Mahfood Distribution Centre, Lakes Pen Road, St Catherine. The well attended meeting was updated on the financials for the 2018 fiscal year ending June and the 2018 first quarter by the managing director, Andrew Mahfood.
Mahfood spoke to the major developments during the year and the quarter including the successful IPO last year. Shareholders were informed on the full resumption of the storage facilities at the headquarters, with cold storage being the latest to come on stream. He stated that not much savings was expected in the switch. There will be cost savings in rental and from a more efficient operation with just one location than two.
The company reported sales revenue of $25.54 billion up 14.8 percent from $21.38 billion in 2017 and generated net profit of $3.29 billion compared to $2.45 billion in 2017. Attendees were informed by the managing director that the 2017 net profit included the one off income from the insurance claim amounting to $636 million before tax which relates to the fire that occurred in May 2016.
The installation of two new bottling lines and one new filler Mahfood told shareholders and guests, should result in 40 percent more efficiency, the lines allows for less packaging material being used to produce bottles and will also result in lower transportation costs. The new lines have created capacity to meet increased demand and facilitate increased exports sales. For the first quarter sales revenue grew

Shareholders at Wisynco 2018 AGM.

just over 12 percent to $6.8 billion but should rise faster in the second quarter with new products for distribution and increased production to meet market demand. Profit grew 15.7 percent to $779 million in the September quarter, from $698 million in 2017, with earnings per share for the quarter ending at 21 cents and is projected by IC Insider.com to reach $1.10 for the full year. Gross Profit also increased to $2.6 billion or 10.4 percent over the $2.3 billion achieved in the same quarter of the previous year. Gross Margin of 37.8 percent was slightly lower than the 38.4 percent for the 2017 first quarter due to the commissioning of the new beverage lines and the devaluation of the Jamaican Dollar, management indicated.
Selling, Distribution & Administrative Expenses for the quarter totaled $1.73 billion or 11.4 percent more than the $1.55 billion in 2017.
Both Andrew and William Mahfood seem very optimistic that the second quarter will show improved sales growth over the first quarter. The settling down of the new lines are major factors as well as continued economic growth in the Jamaican economy.
But the operations were not without problems. The operation of the new equipment took time to settle and this resulted in dislocation in supplying the marketplace with adequate supplies, which held back sales in the first quarter. That problem seems to have been resolved as sales have improved, the two Mahfood brothers told IC Insider and this will show up in increased sales in the second quarter and beyond. Distribution of the Rum Bar brand of spirits produced by Worthy Park Estates commenced in November. Sales from this is expected to reach $500 to $600 million per year, while the distribution of sugar will commence in 2019.

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