Optimistic start to 2021 as car sales inching up and orders increasing

New and used car dealer, Jetcon has seen its revenues nose-dive, forcing some staff to be furloughed, as the COVID-19 pandemic rocked its business last year.

Jetcon’s business was severely impacted by the pandemic, resulting in the Jamaican junior market listed company experiencing one of the worst years of its existence. In its just released 2020 audited financial report, revenues at Jetcon, whose main activities are the importation and sale of motor vehicles, motor vehicle parts and the servicing of vehicles, were down by 38 per cent to end the year at $629 million.

On the positive side, the company managed to contain expenses, which were cut by six per cent from the 2019 amount of $65 million, resulting in a full year loss on operations of $6.7 million. This loss includes increased depreciation based on the new treatment of leases that require lease cost to be booked as an asset and be subject to depreciation.

At reporting date of December 31, 2020, Jetcon had inventory amounted to approximately $392 million, which represents 60 per cent of the company’s total assets. Over 97 per cent of inventory comprises motor vehicles and each vehicle is separately identifiable and traceable.

Cost includes purchase price and all costs specifically relating to bringing the vehicles to its location and in a condition for sale.

Promising start to 2021

As for 2021, Jetcon is expressing optimism that, with the roll-out of vaccinations, society and business will begin to return to normal although noting that the company continues to see greater levels of normality compared to 2020 when there was major interruption to businesses and social events. For the first quarter of 2021, orders for vehicles are up over the similar months of 2020 with sales of vehicles climbing.

The directors report that Jetcon was and continues to be in good financial shape, with no outstanding loans and strong inventory. The directors have admitted that the business was hit particularly hard with the initial onset of the pandemic in March 2020 and again in September with the onset of the ‘second wave’.

To mitigate losses and to boost sales, Jetcon was forced to furlough staff temporarily during the second quarter, cut some prices and introduced new sales initiatives.

2020 one of the worst years after such a positive start

The directors highlighted that there was such a promising start to 2020, which turned one to be one of the worst years of its existence because of the COVID-19 pandemic. The year started with many hopes and expectations given the rising sales during the first two months of 2020 with the following month of March starting to look very promising.

“All of that came to a sudden halt during March when Jamaica encountered its first case of COVID-19. What started out promising turned into one of the worse years for Jetcon,” the company stated in a blurb attached to its 2020 audited report.