Revenues at Wigton Windfarm fell a sharp 21 percent to $2.05 billion from $2.59 billion in the year to March 2021, with a decline in revenues for the number two turbine that suffered a sharp tariff reduction under the agreement with Jamaica Public Service Company. Still, the fall was not purely tariff reduction, as revenues generated by the other turbines also fell.
Revenues generated by the number one turbine fell to $753 million from $802 million in 2021. The number two turbine hauled in $796 million in 2021 but just managed $459 million in 2022 and the third bought $994 million in revenues for 2021 and only $837 million in 2022. A close examination of the audited accounts reveals that the number two turbine ran at a loss.
Cost of sales was relatively steady but up a bit to $820 million from $789 million in 2021 and along with the fall in revenues resulted in Gross Profit dropping a sharp 32 percent to $1.23 billion, from $1.8 billion. Other income, comprising mainly interest and forex gains, rose to $256 million from $218 million.
General administrative expenses rose to $608 million, an increase of 24 percent over the $491 million incurred in 2021. The company incurred lower interest costs of $335 million, down from $503 million, partially due to renegotiating the interest on the loans. Taxation also fell from $234 million in 2021 to $70 million. Depreciation, one of the single most significant expense, amounted to $693 million, up marginally from $680 million in 2021.
The operations generated positive cash inflows of $1.58 billion for the year before capital payments and had a net of $493 million at the end of the year.
Profit fell a hefty 40 percent from $792 million to $472 million for 4 cents per share, exactly in line with ICInsider.com forecast. Depending on how well cash funds are managed, to take advantage of much higher local interest rates this year, earnings for the 2023 fiscal year could hit 5 cents per share.
At the end of March, shareholders’ equity stood at $4.5 billion, with long term borrowings at $4.5 billion and short term at $890 million.
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Current assets ended the period at $4.3 billion inclusive of trade and, with most of it, cash and bank balances of $3.8 billion. Current liabilities ended the period at $1.2 billion. Net current assets ended the period at $3.1 billion.
New bids are in to supply renewable energy to the system. Prior to that, Wigton was gearing to make a bid to supply renewables. If successful, this could provide a significant source of added revenues and profit if a new plant is commissioned.
The stock, traded at 56 cents on Friday on the Jamaica Stock Exchange Main Market, boasts a PE of 11.2 times the current year’s earnings. That compares to the market average of 14. Around half of the Main Market stocks are trading at lower PE ratios, with far more greater growth prospects. The net asset value is 41 cents, with the stock selling at a 37 percent premium to book value.
