DESPITE the summer season bringing elevated temperatures, Wisynco Group Limited was able to meet the usually higher demand for its beverages in full following its recent multi-billion expansion.

The manufacturing and distribution company has spent $11.63 billion in capital expenditure (capex) over the last two years to increase its production capacity by at least 50 per cent to meet the demands of the local market and its greater export ambitions. This was deployed in installing new production lines and high-speed filler machines, along with the expansion of warehouse space and its LNG (liquefied natural gas) plant. The major components of the expansion were completed in December 2023 and March 2024.

While most of the equipment was being brought on stream in its most recent financial year (FY) ending June 30, the company was able to satisfy the local demand for its manufactured beverage products such as Wata, CranWata, Bigga and Boom. Wisynco Chief Executive Officer (CEO) Andrew Mahfood noted at its last annual general meeting (AGM) that the company was practically at full capacity and had been receiving complaints from customers when they couldn’t get certain products.

“We have a lot of capacity. We’re meeting customers’ needs, we have no out-of-stocks [scenario]. This is the first time in any summer for the last, probably, five years that we’ve been able to meet 100 per cent of customers’ needs at this time of year. So, because of that, we’re seeing robust demand,” said Wisynco Chairman William Mahfood in a call with the Jamaica Observer on Friday.

The higher volumes sold during the fourth quarter translated to the company seeing a 12 per cent in revenue to $14.19 billion, the highest quarterly revenue ever. However, consolidated operating profit was flat at $1.32 billion due to the increased expenses needed to meet the larger businesses needs. As a result, the company’s profit before tax for Q4 was down four per cent to $1.46 billion, relative to the $1.53 billion in Q4 2023. Q4 2024 also included a $105.37-million impairment provision for Wisynco’s associate JP Snacks Caribbean Limited, in which it owns a 30 per cent stake.

“What has happened is that all of the investments in the last nine months are now starting to bear some fruit in terms of increased capacity. We’re also seeing a lot more expenses related to those investments from new personnel, training, HR [human resources], marketing expenses, preparing the plant and equipment, and infrastructure. A lot of that [expenses] has not been absorbed by increases to compensate for those expenses,” the chairman added.

For the overall financial year, consolidated revenue was up 11 per cent to a record $54.27 billion — a period which included the company beginning its new distribution arrangement for Jamaican Teas Limited for eight months. Although its gross profit increased nine per cent to $18.38 billion, the gross profit margin was compressed from 34.61 per cent to 33.88 per cent.

The one-sixth rise in Wisynco’s operating expenses to $12.77 billion resulted in operating profit shrinking four per cent to $5.91 billion. Although Wisynco still reported some amount of loss from its associate, JP Snacks Caribbean was profitable for the last two quarters. Wisynco’s PBT grew two per cent to $6.45 billion, with net profit coming in at $5.19 billion and an earnings per share of $1.38.

Despite the minor setback from higher expenses, Wisynco is now redirecting its attention to its exports which grew 25 per cent in Q4 and pushed the FY 2024 figure to $1.17 billion. Wisynco exports to the United States of America, United Kingdom and different Caribbean markets.

“We really didn’t get the production humming until the last quarter; the growth in exports was really just in the last quarter. We are really focusing on it in a big way — ideally, minimum 60-70 per cent — because now we’ll have the portfolio, products and production [capacity]. We need more warehouse and distribution facilities, so that is the next phase of our expansion in the next year. We need more office space as well,” Mahfood explained on the juggernaut business.

Though Hurricane Beryl dealt a blow to Jamaica, Mahfood noted that hurricanes and holidays increase the company’s business activities as consumer demands rise in those periods. As a result, the two recent holidays and one day lost to Beryl would have seen Wisynco’s 500-truck fleet not operating at full capacity.

“We’re seeing declines in the sector, but even more importantly is the trickle-down effect on the surrounding communities and what that is doing to the businesses. The robust kind of demand that we had originally anticipated, we’re not seeing that,” Mahfood explained on his observations of the tourism sector which has been hit due to the USA’s travel advisory.

Despite these headwinds, Mahfood was confident in the overall business which is diversified in distributing products like Coca-Cola, Devon House Ice Cream, and brands such as Trade Winds Citrus and Worthy Park Estate. He explained that this diversity comes from the company’s experience in late 2000’s when it lost the right to distribute Ocean Spray, which was about a quarter of its revenue at the time.

“We had that job fair, and we surveyed most of the people who came to the job fair. I think a lot of people were saying at the time that this job fair was an indication that there are a lot of people out there without jobs. The reality is that most of the people who attended our job fair already had jobs; what they were looking to do was to move from where they were working and come work at Wisynco,” Mahfood explained regarding the May job fair which sought to fill 400 roles.

The company is still looking to add new roles such as blow moulding technician, power plant operator, engineers, and other specialised roles to the 400 plus new jobs resulting from the recent expansion.

Wisynco also promoted Tabitha Athey, its general manager – full service mode to chief commercial officer on July 1. Athey has spent a total of 13 years and eight months with the company. Her promotion comes two years after Wisynco brought back Sean Scott as its deputy chief executive officer.

Wisynco’s total assets rose 14 per cent to $36.81 billion, with its non-current assets doubling to $15.42 billion. The company’s cash balance dipped by half to $5.28 billion as it spent on capex and invested $3.02 billion in corporate bonds to take advantage of high interest rates which should be reduced in the short term.

Mahfood noted that the company is considering replenishing its cash by taking on new debt, which is based on the company only having $3.12 billion in total debt and a return on equity of 23 per cent. Wisynco’s total liabilities stood at $12.04 billion and shareholders’ equity at $24.77 billion for a book value of $6.58.

Wisynco’s stock price has marginally increased since Friday, the stock price closing Tuesday at $21.23 which leaves it down 1.26 per cent in 2024 with a market capitalisation of $79.85 billion. This leaves the company with a price-to-earnings ratio of 15.38 times and a price-to-book ratio of 3.23 times. The company paid a dividend of $0.23, totalling $865.09 million, on August 12 to its shareholders on record as of July 15. The company’s next scheduled dividend is for March 2025.

The National Insurance Fund purchased an extra 2.5 million ordinary shares to become the fifth-largest shareholder with 31,071,979 ordinary shares. Domhad Investments also purchased an extra 2,061,358 shares to become the sixth-largest shareholder with 31,028,913 ordinary shares.