Wisynco profit up 23% for Q2

Wisynco profit rose 23% in the December quarter last year.

Wisynco recorded a 23 percent rise in profit after tax, for the December quarter of $578 million or 16 cents per share, compared to 13 cents per share for the corresponding quarter of 2016.
For the six months to December, net profit ended at $1.22 billion, up just 7 percent over the $1.15 billion earned in 2016 or 34 cents per share versus 32 cents for the corresponding period of 2016.
Revenues for the quarter of $6.14 billion, rose 14.5 percent over the $5.36 billion generated in the corresponding quarter of 2016. Six months’ revenues climbed 15.8 percent to $12.25 billion from $10.59 billion. Gross profit for the quarter rose much faster than revenues, for both the quarter and for the half year. The latest quarter recorded an increase of 26.3 percent, to $2.39 billion over $1.90 billion generated in 2016 and by 20 percent for the half year to $4.58 billion, compared to $3.5 billion, in the previous year.

Wisynco, producers of Wata..

Gross profit margin improved to 39 percent for the quarter compared to 35.3 percent for corresponding quarter of the previous year. For the 6 months ended December, gross profit margin was ahead by 1.4 percent of 2016 to 37.4 percent.
Selling, Distribution and Administrative Expenses for the quarter totaled $1.54 billion or 15.7 percent more than the $1.33 billion for the corresponding quarter of the prior year. “Expenses for the quarter included $26 million of costs related to the May 2016 fire and $71 million for the year to date, and the Directors feel these should be fully behind us by the middle of the 4th Quarter” the directors reports stated.

Selling and distribution expenses rose 13 percent to $2.6 billion for the six months while Administration cost climbed sharply to $235 billion from $134 million for the December quarter and for the six months, cost rose to $312 from $255 million in 2016.
Finance Costs for the quarter rose to $133 million from $31 million in 2016 and for the six months, finance cost moved from $74 million, to $145 million. According to the directors report to shareholders part of the increase “is a loss on the revaluation of our US dollar deposits of approximately $79 million due to the Jamaican dollar revaluation to a quarter end rate of 125, at the end of December 2017.”

Wisynco operates at two main locations situated in St. Catherine: White Marl and Lakes Pen.

The directors reported that, “the quarter in question saw some challenges even as we recorded fairly good growth in top line revenue. We had some of the highest level of rainfall in many years during the quarter which does not auger well for our customers’ businesses as well as beverage sales generally. The construction of our cold storage facilities has also been delayed slightly due to the rains and this would have impacted on our chilled and frozen business. We now expect our cold storage facility to be complete during the 4th quarter which will result in improved distribution and cost synergies. During the quarter we continued to look at ways to reduce sugar intake for consumers through initiatives such as reducing portion sizes in our full sugar products as well as reduced sugar formulas for our beverage portfolio.”
At the end of the year current assets stood at $7.9 billion with cash funds of $3.3 billion, against current liabilities of $2.9 billion. Borrowings amounted to $2.8 billion with equity capital of $7.8 billion that reflects the sale of shares to the public in December that brought in $1.1 billion and after paying dividend of just over $1 billion.
Based on the results for the quarter and half the company is on target to deliver earnings around 70 cents for share for the full year. The stock last traded at $10.55 on the Jamaica Stock Exchange for a PE of 15, for the 2019 fiscal year IC Insider.com is forecasting $1.10 per share in earnings for a PE of 10.

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