Chairman of Wisynco Group Limited William Mahfood is not worried about the company’s recent 25 per cent dip in profits recorded for the second quarter.
“Overall, we are pleased with the results, growing the revenue at 25 per cent. For a company of our size it is not a small task,” he shared with Caribbean Business Report from his office in Lakes Pen, Jamaica, recently.
For the quarter ending December 31, 2019, the manufacturing and distribution company reported a net profit of JM$582.5 million, after reaching JM$775.7 million a year prior.
In a report to shareholders, Mahfood revealed that the decline was due to “one-off marketing costs to support new product development and introduction during the quarter and additional Christmas related marketing expenditures”.
In particular, he said that the company engaged in promotional activities for Coco-Cola. Moreover, Wisynco introduced its new Sparkling Cran-Wata product line and, as part of a marketing campaign for the brand, contracted the services of dancehall artiste Elephant Man.
” The revenue from that, in addition to the incremental revenue gained from the partnership with Worthy Park, accounts for 10 per cent of the overall increase.”– Chairman of the Wisynco Group, William Mahfood
Wisynco also expended JM$262 million for the closure of its Styrofoam plant and lost JM$68 million as a result of the “revaluation of the Jamaican dollar”.
However, for the half-year, Wisynco’s revenue increased by 28 per cent to JM$13.3 billion.
“If you look at the six months…the company made a 14 per cent net profit over the prior year,” Mahfood emphasised.
Wisynco’s net profit for the six months topped JM$1.5 billion earned in 2018/2019, ending at JM$1.8 billion on December 31, 2019.
Looking at the company’s balance sheet, it increased investments in associates from nil to JM$597 million.
Last December Wisynco Group (Caribbean) Limited, its parent company, announced a 30 per cent stake acquisition of Worthy Park Estate Limited. With this acquisition, it negotiated, and secured, a five-year exclusive distribution agreement with Worthy Park.
Going back to April, the company acquired a 30 per cent stake in JP Snacks Caribbean Limited (‘JP Snacks’) and brokered “distribution arrangements for JP St Mary’s snacks globally”.
As such, the chairman pointed out, “So the investment in Jamaica Producers Snacks is what accounts” for the increase in revenue.
“And, definitely, the revenue from that, in addition to the incremental revenue gained from the partnership with Worthy Park, accounts for 10 per cent of the overall increase,” Mahfood told Caribbean Business Report.
The remaining 15 per cent in revenue, he said, came from organic growth in sales across all categories.
“It’s been from increases in the businesses we manage, for example, Nestlé. They are pleased; their business in Jamaica grew 19 per cent,” Mahfood underscored.