Durrant Pate/Contributor

There has been a noticeable fall-off in wind production at alternative energy company, Wigton Energy Limited, resulting in a precipitous contraction of 496.4 per cent in net profit for the December 2024 quarter.

Net profit tumbled to J$67.7 million, largely due to the one-off tax credit given in 2023 and lower wind production this year relative to the same period last year. The average plant availability declined to 78.0 per cent from 91.0 per cent posted in December 2023, caused by the downtime associated with Hurricane Beryl. 

Pre-tax profit declined by J$100.9 million or 1,320.5 per cent. Wigton’s pre-tax net profit for the combined three quarters contracted by $262.2 million or 53.4 per cent compared to the same period in 2023. The contraction after tax was primarily due to the aforementioned one-off tax credit. 

Total revenue up marginally

Total revenue representing sales and other income closed the December quarter on J$1.81 billion, up $55.9 million or 3.2 per cent compared to J$1.75 billion in 2023. The increase in total revenue was as a result of the higher production levels up to June 2024 and a business interruption insurance provision (claim) of $239.4 million related to Hurricane Beryl, which helped mitigate the post-hurricane production loss. 

Total expenses which include cost of sales, general administrative expenses, and share of associates declined by J$26.0 million or 2.1 per cent  The marginal improvement was achieved mainly as a result of prudent management. Finance expenses also declined by J$43.7 million or 14.1 per cent, as the company continues to benefit from the March 2022 restatement of its bonds, which introduced lower interest rates and quarterly principal payments. 

During the reporting period, Wigton experienced a 3.8 per cent decrease in total assets, amounting to J$396.8 million. Non-current assets saw a 2.7 per cent decline, totalling $155.7 million, primarily due to depreciation of the company’s fixed assets. 

Ongoing negotiations with key stakeholders are in progress to replace the fully depreciated Wigton Phase I equipment with new equipment, as previously disclosed. 

Strong financial position

Current assets decreased by J$241.1 million or 5.3 per cent. Wigton maintains a strong financial position with a current ratio of 4.2x, indicating ample liquid assets to meet all short-term financial obligations. Profitable operations year over year have bolstered Wigton’s balance sheet and increased its flexibility to expand through new initiatives currently underway. 

Despite the challenges posed by the hurricane, Wigton achieved positive operating cash flows of J$442.8 million. However, cash was impacted by outflows from financing activities, such as loan repayments, interest payments, and dividends, as well as capital expenditure. 

On the positive side, favourable foreign exchange fluctuations contributed to improved cash flow, particularly for foreign currency-denominated balances. As a result, Wigton’s overall cash balance decreased marginally by $1.0 million, reflecting the combined effect of financing and investment outflows, despite strong operating cash generation. 

Total liabilities amounted to J$4.6 billion, marking a significant decline of $0.8 billion or 14.9 per cent compared to the same period last year when liabilities stood at J$5.4 billion. This reduction primarily resulted from quarterly principal instalments for Bond A and the deferred tax liabilities. 

Throughout the period, Wigton successfully fulfilled all debt covenants, ensuring timely and complete payments of both interest and principal amounts.