Profit surged 121 percent before corporate taxes, to $413 million, from $186 million at Wigton Energy for the six months to September 2024, net profit decreased 39 percent, to $310 million, from $504 million in the similar period last year, due primarily to a tax credit of $318 million arising from a reduction in the tax rate from one third to 25 percent that was retroactively applied to profits.

For the latest quarter, profit jumped a solid 144 percent before tax to $192 million, from $79 million in 2023, with net profit falling to $144 million following taxation of $48 million compared with a profit of $436 million following a tax credit of $357 million in 2023.

Total revenue comprising sales and other income for the six months to September 2024, amounts to $1.42 billion, an increase of 13 percent compared to $1.25 billion earned in 2023. Management in their report to shareholders stated that “the increase in total revenue was as a result of (i) the higher production levels up to June 2024, which assisted in achieving the total production of 63.6 million kWh during the period despite the lower average availability being 74.9 percent as a result of the downtime associated with hurricane Beryl, and (ii) a provision of $239.4 million representing the anticipated business interruption insurance proceeds related to Hurricane Beryl.” Investors also need to be aware that there are seasonal variation in power generation, with the best periods being in the June quarter.
Cost of sales fell to $229 million in the September quarter from $256 million in 2023 and from $495 million in 2023 for the half year to $428 million.
General administrative expenses rose 11 percent to $387 million from $349 million in 2023 in the half year and was down slightly in the second quarter to $191 million versus $193 million in 2023.
Finance costs declined to $90 million in the September quarter from $103 million and in the half year, it declined from $210 million to $183 million.
Current Assets ended at $4.6 billion in September which includes cash and equivalent of $3.55 billion and receivables of $772 million and Current Liabilities amounts to $1.09 billion of which current portion of long term loans amounts to $869 million.
Shareholders’ equity amounted to $5.4 Billion and Long term liabilities ended at $2.6 billion.
The directors advised that “ongoing discussions with key stakeholders are centred on the repowering of Wigton Phase I located in Rose Hill, Manchester. The Company was one of two (2) entities pre-awarded by the Generation Procurement Entity (GPE) in their September 2023 tender for additional energy to the grid. The decision of the GPE as to the final award is now awaited.”
Wigton is involved in a critically important area of economic activity in Jamaica, with scope for expansion, this makes it an attractive vehicle, but the stock with a PE around 23 times current earnings is well above the market average of 14.5. The company is banking on getting approval for their bid to be awarded to supply power to the national grid. With just two entities preapproved they stand a good chance of getting approval. They have received approval for renewal of the number one wind turbine, the price of the output is yet to be disclosed.
Investors in this stocks will find greater and more compelling values elsewhere currently.