Mon | Mar 27, 2023

Wigton hunting more green projects as revenues, profit fall

Published:Wednesday | July 20, 2022 | 12:07 AM

Amid a faltering revenue performance from ageing wind turbines and adjusted rate for the wind-generated electricity it sells to monopoly power distributor Jamaica Public Service Company Limited, JPS, Wigton Windfarm Limited is reimaging. It is pursuing a diversification programme aimed at de-emphasising its wind moniker, while repositioning as an alternative energy company, venturing into other forms of green energy production.

Already, Wigton has acquired a 21 per cent stake in electric vehicle dealership Flash Motors, and entered a joint-venture partnership with another foreign entity to collaborate on the execution of alternative energy projects, starting with solar system. Falling average wind availability and a cut in revenues from wind turbine operations have sent it pushing into other areas for income, as it braced for an expected dip in revenues for the past year.

The company expected to post revenues of about 14 per cent less year-on-year. It grossed just over $2 billion for the year ended March 2022. The out-turn was 21 per cent less than the $2.59 million for 2021.

“The fall in revenue was due largely to a lower wind regime during the year which affected production/sales, along with the lower contractual rate now being received in respect of Wigton Phase II and which came into effect during the financial year,” Wigton’s Managing Director Earlington Barrett told the Financial Gleaner, in response to questions about the just-released annual report.

Wigton has consistently touted what it says is its constant search for other revenue streams. Subsequent to March 3, 2022, the company says, it entered into two joint-venture agreements with IEC SPEI Ltd, IEC. The agreement covers a contract to design, supply, install, test and commission a two-megawatt, MW, photovoltaic, PV, system at the Norman Manley International Airport in Kingston.

“The company is participating in the project as a co-venturer with IEC and entered into a single-project, joint-venture agreement on April 5, 2022. The company’s project outlay is primarily the provision of project management and project oversight services, along with a contribution of US$200,000 towards working capital,” Wigton says in notes accompanying the latest financials.

The other joint venture with IEC covers “the design, installation, operation, and maintenance of green energy solutions for the benefit of third parties, who intend to generate green energy for their own consumption or to sell power to JPS. Wigton’s contribution to capital is $600,000,” the company said.

Barrett is clear about the meaning of the partnership. He says it is underpinned by a desire to be more than just a wind energy company.

“The driving philosophy is the thrust towards clean technology and green energy. This is in line with Wigton’s diversification plan to move away from being branded solely as a wind energy independent power producer, to an energy solutions company,” Barrett said.

Wigton also has a foot in the automobile business through a March 2022 purchase of a 21 per cent stake in St Lucia-registered Flash Holdings for $137.53 million. The shareholders’ agreement also grants Wigton an equivalent share in Flash’s wholly owned subsidiary, Flash Motors Company Ltd, the company says. Flash Holdings and Flash Motors are listed in the Wigton financials as associate companies.

Meanwhile, Wigton is forecasting continued increased costs of operation. Barrett says that given the natural ageing of the company’s plants, there will be a need to spend more to keep them viable.

“Increased costs are likely with the continued need to maintain the plants that are ageing year over year. Nevertheless, Wigton always endeavours to manage its expenses in a prudent manner,” according to Barrett.

With total assets of $9.8 billion, a combination of increased operational costs and lower revenues affected Wigton’s bottom line. Net profit fell some 37 per cent to $472 million; more than $300 million less than the $792.7 million in 2021.

Barrett said Wigton is looking to onboard more green energy projects. He gave no details of the other including the size of the pipeline, saying those projects are covered by confidentiality agreements.

Listed on the Jamaica Stock Exchange, Wigton’s top four shareholders at March 31, with more than five per cent each, were Mayberry Jamaica Equities Limited, Victoria Mutual Building Society, the government’s National Insurance Fund, and ATL Group Pension Fund Trustees NOM Limited.