Jetcon Reports Net Loss In FY2020

• For the financial year ending December 2020, Jetcon incurred a net loss of $6.73Mn when compared to the net profit of $60.30Mn in FY2019. The weaker performance reflects a falloff in revenues (-38.7% or $$396.65Mn) as the COVID-19 induced recession, weighed on the demand for motor vehicles.
• To mitigate losses and boost sales, the company had to furlough staff temporarily during the second quarter, cut prices on some vehicles, and introduce new sales initiatives.
• With the focus on cost reduction, indirect expenses dropped by 6.1% (or $4.25Mn), while direct expenses fell by 38.4% or ($341.77Mn) over the period.
• Management is optimistic about 2021, given the rollout of vaccinations locally, which will be a major determinant of the pace of economic recovery. Management also gave early guidance that vehicle orders and sales for the first quarter of 2021 have grown year over year (YoY). The prospective economic rebound will be accompanied by a reduction in unemployment, which when combined with the low-interest-rate environment, will support the demand for motor vehicles and help drive sales. However, return to pre-pandemic sales volumes is unlikely to materialize in 2021.
• Since the start of the year, Jetcon’s stock price has appreciated by 1.2% to close trading at a price of $0.80 per share and currently trades at a price to book of 0.4x which is below the Junior Market Distribution Sector Average of 5.2x.

(Source: Jetcon’s Financials)