Supply chain challenges continues but improving

Durrant Pate/Contributor

Jamaican distribution group, Wisynco has recorded its highest quarter revenue in history with a bumper outturn for the three months ended September 30, 2022.

Revenues for the quarter came out at a record J$11.9 billion, an increase of 29.8 per cent above the J$9.2 billion achieved in the corresponding quarter of 2021. This was due mainly to the increased demand for the company’s products in all channels including exports, which were up 10 per cent over 2021.

The management is encouraged by the latest quarterly returns noting that, “the supply chain challenges continued into this quarter. However, we are seeing improvements”.

Net profits attributable to shareholders for the period amounted to J$1.3 billion or J$0.35 per share for the quarter, which was 34.1 per cent greater than the J$967 million earned for the prior year.

Pre-tax profit totalled J$1.7 billion, which is J$445 million or 34.7 per cen higher than the J$1.3 billion of the comparative quarter of 2021. This figure includes an exchange loss of J$126 million compared to the J$59 million loss for the comparative quarter last year.

Balance sheet strong

Earnings per share for the prior year quarter was J$0.26. The management reports that Wisynco’s balance sheet remains strong with a current ratio of 2.8 (same as last year’s quarter). Gross margin came out at 36.2 per cent, which is slightly higher than the 35.6 per cent for the corresponding quarter in 2021.

Selling, Distribution & Administrative expenses (SD&A) is up 27.4 per cent to J$2.6 billion over the J$2 billion recorded last year. Wisynco’s SD&A expense to sales ratio was 21.6 per cent for the quarter, compared to 22.0 per cent in the prior year.

Inflationary increases and variable expenses, which increase with revenues are the primary reasons for the expenditure growth. However, these increases came out at a slower rate when compared to the rate of growth in revenues.

Higher inventories

Inventories remain higher than the prior year although slightly lower than at June 30, 2022, as the company continues to maintain higher amounts of key materials, due to supply chain challenges. The management is expecting some normalisation of inventories going into second and third quarters.

“As we utilise the inventories on-hand and we are seeing less congestion at global ports and freight rates improving,” the William Mahfood-led management team management advises shareholder in its quarterly report.

Recycling efforts through Recycle Partners of Jamaica (RPJ), which involve the collection, baling, and exporting of plastic bottles have been ramped up with very productive industry meetings/collaboration.

RPJ’s reported collection rate is upward of 16 per cent, up from five per cent when RPJ started two-and-a-half years ago, with the intention to reach 30 per cent by December 2023.

According to the management team, “the industry’s commitment and the strategic efforts are designed to ensure we (the industry) do our part to keep our country clean. We expect RPJ to commence reporting on this data to the public in the coming months in order to ensure complete visibility on the efforts of the Partnership”.