FONTANA Limited is reporting a net profit of $276.5 million for the financial year ended June 30, 2020, despite a 9.8 per cent decline over the corresponding period last year.

Revenue for the period was $4.5 billion, representing a 21.8 per cent increase over the $3.7 billion recognised in the previous year, while income increased by 53.5 per cent year over year due primarily to growth of in-store revenues and rentals.

In its financial statement posted Sunday, Fontana’s Chief Executive Officer Anne Chang indicated that the company was impacted by COVID-19 and the Government protocols that have been implemented.

“Given the unprecedented impact of COVID-19 on the global and Jamaican economies during the April to June 2020 quarter, we are encouraged by these results. We are particularly pleased that, despite the impact of curfews, reduced operating hours and reduced consumer purchasing power, we were able to achieve solid growth in customers, revenues, and operating profits year over year,” Chang stated in the report to shareholders.

Fontana, a pharmacy and retail chain with five stores in Kingston, Montego Bay, Ocho Rios, Mandeville and Savanna-la-Mar, opened its sixth and largest at Waterloo Square, Kingston, in October 2019.

Citing the Waterloo store as the influence, Chang stated that operating expenses for the financial year under review increased by 23.4 per cent, with the new store accounting for most of the overall increase in expenditures for the fiscal year.

Net assets as at the end June 2020 increased by 65 per cent. This was due primarily to growth in fixed assets, inventories, and cash balances from the new Waterloo store, as well as the impact of International Financial Reporting Standards (IFRS) 16 wherein the value and liability associated with right of use leased properties are now recognised on the balance sheet.

The net impact of the IFRS 16 adoption was $83.8 million, which included a decline of $35 million in administrative expenses (rent and depreciation) offset by the increase in finance costs (lease interest expense and loss on foreign exchange movements) of $118.8 million.

Shareholders’ equity grew by $226.5 million, an increase of 17.9 per cent over the prior corresponding period.

Earnings per stock stood at $0.22, a decrease when compared with the $0.26 recorded in the prior corresponding period.

Despite the challenges created by the COVID-19 crisis, Fontana, in partnership with the Wray and Nephew Foundation, made back-to-school donations to 90 basic school children in communities between Kingston and St Elizabeth.

In addition, through its partnership with UniCycle, Fontana donated school uniforms and supplies to students in need.

“The ‘Fontana Food for Families’ initiative, which collects clothing and food supplies for families adversely affected by the COVID-19 crisis, continues to provide a much-needed lifeline to our fellow Jamaicans,” Chang stated.