Successful cost containment measures credited for turnaround performance
GWest Corporation, which has been suffering financial hemorrhaging for the past year and a half, has finally turned the corner reporting strong profits for 2021.
GWest, the Montego Bay-based medical and real estate outfit for its financial year ending March 2021 reversed the 2020 losses of $47.50 million to posts a profit of $22.19 million for the year ended March 31, 2021.
“This reduction in losses was mainly due to our successful cost containment measures, the effect of which significantly offset the increase in depreciation charges and unrealised net foreign exchange losses incurred for the year,” the management reported.
As it regards revenues, there was a reduction during 2021 due mainly to the onset of the COVID-19 pandemic, which resulted in a closure of several businesses and a reduction in operating hours due to curfews and work from home orders.
2022 main focus of increasing increased occupancy levels
According to the management, “our main focus for the next financial year is to increase our revenue through increased occupancy levels and thereby our real estate rentals as well as the build out of our surgical and inpatient facility, which we forecast to become one of the main sources of our increased revenue generation”.
This will be done while the company remains focused on controlling operating expenses in line with its plan to increase capacity to drive revenue. During the year in review GWest’s investment properties portfolio went down from $946.7 million to $946.5 million, arising from the sale of property of $129.43 million and fair value gains of $101.46 million.
In spite of this decline, the company’s investment properties remain strong.
GWest is now in active negotiations regarding additional leases and sales, which will further strengthen its cash position and reduce its overall leverage.
Total assets decreased from $1.70 billion to $1.60 billion due in part to the classification of $35.66 million, as a ‘Right-of-Use’ asset. The company’s receivables were down from $249.43 million in 2020 to $153.56 million for the year under review.
This resulted from the collection of the sale proceeds from the sale of investment property that was contracted in the prior financial year and included in prior year receivables. The reduction in equity and liabilities was due to a reduction in trade payables from $175.42 million to $106.35 million.
On a positive note, GWest’s borrowings declined from $270.62 million to $224.12 million. Equity increased from $668 million to $690 million, resulting from the profit reported for the financial year.
Net cash generated during the year was $4.6 million, resulting in an increase in cash and cash equivalents at the end of the year of $44.74 million this year. This result was mainly attributable to the improved performance through loss reduction and sale of investment property.
Cautious optimism for 2022
Regarding the prospects for 2022, GWest board says it is cautiously optimistic about the coming year, stating that “there are encouraging indicators that tourism will begin to normalise and this augurs well for the macro economy”.
The medical and real estate outfit says it has invested in the build out of its surgery and inpatient unit, to be called ‘Gwest Medical and Surgery Centre’, is expected to be opened next month. Construction of the Gwest Medical and Surgery Centre started in January 2021.
The management reports that it has obtained positive feedback from local surgeons with respect to the completion of the centre, which will be the cornerstone of GWest’s medical services, which is integrated with its existing medical units. This will enable GWest to provide a comprehensive health care product that will positively impact our operations and income.
The board of directors remains confident of management’s dedication and drive to maintaining the company’s continuing improved performance despite the ongoing global challenges.