USED-CAR dealer Jetcon Corporation Limited is grappling with challenges primarily attributed to soaring interest rates, significantly impacting the purchasing capacity of potential car buyers.
The company reported a loss of $3.50 million for the second quarter ending June 30, 2023. The setback was attributed to a prudent fiscal policy adopted in April 2023, prompting the disposal of 10 vehicles from its books. The move was strategically aimed at curbing losses associated with depreciating assets.
In a report to shareholders, Jetcon expressed confidence in the company's resilience, referring to its status as "a viable going concern" despite the prevailing challenges. The financial statement highlights that had the 10 vehicles been sold at market value, Jetcon's second-quarter profit would have been $8.99 million. The report did not specify the types of vehicles disposed of.
Jetcon earned gross profits of $14.9 million but incurred expenses of $18.4 million, resulting in the loss.
The second quarter of 2023 concluded with Jetcon Corporation experiencing a 27 per cent drop in revenue, totalling $184 million compared to the same period in 2022. The half-year results mirrored this decline, with a 28 per cent reduction amounting to $363 million. "This was mostly due to increased rates by the Bank of Jamaica, which saw lenders preferring to invest available funds with the Bank of Jamaica rather than lend to those wishing to purchase vehicles," the report said.
The report did not say whether or not the interest rates are more favourable to people purchasing new cars with lower interest rate options; calls to John and Andrew Jackson to clarify went unanswered. However, Jetcon Corporation did reveal that it is actively involved in discussions with the Jamaican Government, lobbying for a reversal of the Bank of Jamaica's interest rate policy. The company aims to create a more favourable lending environment, ultimately revitalising the automotive industry.
This second quarter interim report marks the first revision of its Q2 figures this year, following two other revisions in 2021. Jetcon's Q3 numbers, expected on Tuesday, November 14, are still pending submission.