Second-quarter profit falls at Jetcon; reverses years of solid growth

Wednesday, August 21, 2019

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Jetcon Corporation Limited (Jetcon) m anaging d irector Andrew Jackson is informing that for the second quarter ended June 2019, the company's net profit of $8.67 million has reversed three years of solid growth for the company. Jetcon recorded a net profit of $34.71 million in the prior year.

“The second quarter was another challenging one for Jetcon Corporation,” Jackson stated in the unaudited report to shareholders on Wednesday last (August 14).

“Revenues decreased by 26 per cent to $221 million, compared with $300 million in the June 2018 quarter,” he continued.

The pre-owned car dealership experienced a decrease in gross margin, from 18.9 per cent for the corresponding quarter in 2018 to 16.5 per cent for the quarter under review.

According to Jackson, the reduced margin occurred due to the reduction in prices to move inventories during the first half of the year, as a strategy by the management team to combat the downturn results. However, he added that he expects the company to offer less discounts as the year progresses.

Despite Jetcon's revenues and profit falling by 22 per cent and 34 per cent for the first half of 2019, Jackson assured that the company has seen positive developments since June, with sales up 10 per cent ahead of 2018 in June and July.

“Inventory of motor vehicles and parts have increased by 14 per cent since June 2017 to reach $477.6 million; an ongoing deliberate strategy to increase choice for customers and sales heading into [quarter three], historically our strongest quarter in sales, aided by the use of the new Special Economic Zone,” Jackson said.

The special economic zone refers to the area in which the business and trade laws are different from the rest of the country.

Earnings per share ended at 1.49 cents, a decrease compared to the 6.58 cents recorded in 2018, while total receivables amounted to $52 million, which included amounts deposited with suppliers for goods.

The company started to pay out a dividend of three cents per share on August 15.


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