Sun | Nov 18, 2018

$2.3b profit for Wisynco

Published:Friday | August 17, 2018 | 12:00 AMSteven Jackson

The fire that gutted a section of Wisynco Group's complex two years ago cost the company close to $120 million in business disruptions, but it also pocketed nearly $600 million as net insurance proceeds.

The insurance inflows, alongside the beverage makers normal business, led to bottom line results of $2.4 billion last year.

This year, bottom line profit was lower at $2.29 billion; but matched against Wisynco's prior results without the fat from the insurance proceeds, it reflects a gain of 13 per cent on normalised profit of $1.97 billion at June 2017.

Wisynco effectively grew profit from 55 cents per share last year to 62 cents per share in the annual period ending June 2018, retaining the gains at the top line from sales that rose 14 per cent to $24.5 billion.

In the wake of the fire in 2016, Wisynco developed a new distribution centre and invested in new production lines. Capital expenditures on fixed assets in the past year amounted to $2.6 billion, of which $1.5 billion represented the largest capital investment in production equipment made by Wisynco since its inception, the company said Tuesday at the release of its FY2018 earnings report.

"We are now confident in our ability to supply and meet the growing demand for our beverages both locally and in the export markets, including planned new product development. This new production capacity will be commissioned during the first quarter of fiscal 2019," said Chairman William Mahfood and CEO Andrew Mahfood in a joint statement.

That fiscal quarter referenced extends from July to September 2018. The company said it expects to complete installation of new cold-storage facilities this month.

Wisynco launched an IPO and listed on the stock market at the end of last year. As part of that process, the group reorganised its operations to strip out non-core businesses, which were transferred to entities held by Wisynco Group's ultimate parent company through a non-cash transaction last October. The "derecognition" of the non-core companies resulted in the transfer of $1 billion in net assets, which was reflected on Wisynco's books as a change in the company's equity.

Still, Wisynco closed the year with a higher book value - of $8.69 billion, compared to $7.56 billion in 2017 - due in part to the IPO proceeds from which it netted $1.13 billion.

Alongside the core manufacturing operation and distribution of consumables, the group also continues to own Indies Insurance Company Limited.

steven.jackson@gleanerjm.com