February 14, 2020

Wisynco Group Limited (WISYNCO), for the six months ended December 31, 2019, reported total revenue of $17.11 billion, a 28% or $3.76 billion increase when compared with the $13.35 billion reported for the same period in 2018. Total revenues for the quarter amounted to $8.49 billion reflecting an increase of 25% over the $6.80 billion achieved in the corresponding quarter of the previous year. Management noted, “We had growth in all major product categories notwithstanding tempered demand for some products at the start of the 2nd Quarter due to rains which continued into early October.”

Cost of sales for the period amounted to $10.92 billion, up 35% relative to $8.10 billion reported in 2018. Consequently, gross profit rose 18% to close at $6.19 billion compared to the $5.24 billion for the same period a year earlier.

Total expenses for the six months rose 22% to close at $4.24 billion (2018: $3.48 billion). Of total expenses, selling and distribution expenses climbed 21% to total $3.55 billion (2018: $2.94 billion), while administrative expenses increased 26% to $685.63 million (2018: $543.50 million). Total expenses for the second quarter rose 25% to $2.19 billion (2018: $1.75 billion). Other income for the six months rose 14% to $62.75 million (2018: $54.90 million). According to WISYNCO, “We incurred additional one-off marketing costs to support new product development and introduction during the quarter and additional Christmas related marketing expenditures. Approximately 10% of the increased expenditure was as a result of the increased revenues”

As such, WISYNCO booked an 11% increase in operating profit to $2.02 billion (2018: $1.81 billion).

Finance income for the period amounted to $75.27 million, up 78% from the $42.20 million reported for the corresponding period in 2018. Finance costs decreased 48% to $81.33 million for the period from $154.98 million for 2018.  The company noted, “Included in Finance costs are foreign exchange losses of approximately $68 million as a result of the revaluation of the JAD.”

Profit before taxation amounted to $2.01 billion, relative to $1.70 billion reported in 2018, an 18% increase year over year. Taxation for the period amounted to $421.52 million (2018: $325.52 million). Profit from continuing operations amounted to $1.59 billion relative to $1.38 billion booked for the comparable period in 2018. Profit from discontinued operations totalled $165.38 million versus $168.26 million in 2018. As such, net profit of $1.76 billion (2018: $1.54 billion) was posted for the six months ended December 2019, representing a 14% increase year over year. Net profit for the second quarter amounted to $582.50 million relative to $775.70 million in 2018.

Management noted, “Due to the closure of the Styrofoam plant with effect December 31, 2019, in accordance with the Government of Jamaica’s ban on production and sale of Styrofoam in Jamaica effective January 1, 2020, there was a one-off loss accounted for and reported in this interim report as discontinued operations which impacted our Net Profit by $262 million.”

Earnings per share (EPS) for the quarter amounted to $0.16 (2018: $0.21), while the EPS for the six months amounted to $0.47 (2018: $0.41). The twelve-month trailing EPS amounted to $0.84. The number of shares used in our calculations is 3,750,000,000. Notably, WISYNCO’s stock price closed the trading period on February 13, 2018 at $22.80.

Balance Sheet at a Glance:

As December 31, 2019, WISYNCO’s assets totalled $19.40 billion, $3.25 billion more than the $16.14 billion recorded last year for the same period.  The increase in total assets was largely due to increases in ‘cash and short term deposits’ by $1.12 billion to close at $4.35 billion (2018: $3.23 billion).

Shareholder’s equity closed at $12.51 billion (2018: $9.97 billion).  As such, the book value per share was $3.34 (2018: $2.66).

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