INTERIM RESULTS Third Quarter ended September 2018 Unaudited Financial Statements

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Hubert Richards
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1 Jetcon Corporation Limited INTERIM RESULTS Third Quarter ended September 2018 Unaudited Financial Statements

2 Report of the Directors to Shareholders of Jetcon Corporation Limited For the Third Quarter ended September 2018 After three years of strong growth in revenues and profit Jetcon Corporation, dealers of quality pre-owned cars, is seeing much slower gains in revenues, in 2018, resulting in lower profit for the third quarter and year to date. Growth in Revenues - Revenues for the year to September, amounted to $892 million, slightly higher than the $887 million generated in the 2017 period. Revenues fell 14 percent below the same quarter in 2017, to $287 million, and is flat for the nine months to September primarily resulting from unusually slow sales in August, historically, one of the best months for sales. Sales returned to normal in September with October sales being ahead of October Net profit for the nine months is $94 million versus $128.6 million for the similar period in 2017 resulting in earnings per shares (EPS) of cents, in 2017 EPS was cents. Much more impactful than the decline in sales, is a decrease in gross margin, from 20 percent to 13 percent for the September quarter, resulting in decline in profit, to $11 million versus $48 million in Earnings per share ended at 1.93 cents versus 8.29 cents last year. Additionally, a charge of $3.6 million for storage relating to the importation of vehicles in 2017 was not billed by the supplier until 2018 with the amount being booked in the September 2018 quarter. We also incurred additional rental charges of nearly $5 million for new space leased at the wharf which will result in lower cost and facilitate more efficient importation of vehicles going forward, these costs resulted in an increase in direct cost of sales and help to reduce the profit margin in the quarter. Margin was also affected by discounting of some vehicles that were acquired to help normalize the inventory ahead and help to prevent stockouts when pre-shipment inspection of the car market in Japan changed. The new importation regime also resulted in increased acquisition costs. We have placed more emphasis on the servicing segment and improvements to the department are beginning to reap benefits, with a 107 percent increase in service revenues, for the nine months to September compared to last year. Balance sheet - Inventory of motor vehicles and parts have increased over September 2017, to reach $422 million, a strategy to increase choice for customers and sales, as well as a countermeasure to the slow shipping processes earlier in the year with the implementation of the Pre-inspection regime before vehicles are shipped to Jamaica. Total receivables amount to $56 million which include amounts deposited with suppliers for goods. Outlook Now that the market has adjusted to the pre-shipment inspection regime, normalcy is returning to the market and we expect shipping time and costs to decrease going forward. The future also involves generating more revenue streams, as well as making full use of the Special Economic Zone, as soon as the status is finalized. Revenues since the third quarter up to October is ahead of the similar period in 2017 by 15 percent. 1

3 JETCON CORPORATION LIMITED Statement of Comprehensive Income (unaudited) Third quarter ended September 30, 2018 Third Quarter 9 months to September $ $ $ $ Revenue 286,807, ,221, ,282, ,547,467 Cost of Sales (258,414,643) (264,783,330) (743,677,294) (703,674,855) Gross Profit 28,393,110 68,437, ,605, ,872,612 Other income 39, ,492-28,432,920 68,437, ,567, ,872,612 Expenses: Selling and marketing expenses (6,247,792) (6,268,985) (19,244,781) (17,389,401) Administrative and other expenses (10,602,817) (9,772,800) (35,263,518) (26,902,138) Financial expenses (237,816) (4,033,396) (829,498) (9,888,403) Total expenses (17,088,425) (20,075,181) (55,337,797) (54,179,942) Net profit before tax 11,344,495 48,362,500 94,229, ,692,670 Taxation (60,000) - (60,000) - Total comprehensive income 11,284,495 48,362,500 94,169, ,692,670 Number of shares in issue 583,500, ,500, ,500, ,500,000 Earnings per share [Cents]

4 JETCON CORPORATION LIMITED Statement of Cash Flows Third Quarter ended September 30, $ $ CASH FLOWS WERE PROVIDED BY/ (USED IN): Operating activities Net profit 94,169, ,692,670 Items not affecting cash resources: Depreciation 1,260, ,000 Taxation 60,000 - Net cash provided by operations 95,489, ,367,670 Changes in operating assets and liabilities (22,822,268) (75,983857) Taxation paid (60,000) - Cash provided by operating activities 72,607,024 53,383,813 Cash flows from financing activities Dividend paid (20,422,501) (13,615,000) Loan (repaid)/received (19,054,235) 20,168,020 Cash (used in)/provided by financing activities (39,476,736) 6,553,020 Investment activities (17,352,006) (30,842,966) Increase in cash and cash equivalents 15,778,282 29,093,867 Cash and cash equivalent at beginning of year 14,843, ,751 Cash and cash equivalent at end of year 30,621,307 29,599,618 Represented by: Bank overdraft (171,254) (5,904,859) Cash and bank balances 30,792,561 35,504,477 30,621,307 29,599,618 3

5 JETCON CORPORATION LIMITED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY [UNAUDITED] FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 No of Share Capital Retained Shares capital reserves earnings Total $ $ $ $ Balance as at January 1, ,500,000 88,817,218 16,720, ,482, ,020,702 Total comprehensive income 128,692, ,692,670 Dividend paid (13,615,000) (13,615,000) Balance as at September 30, ,500,000 88,817,218 16,720, ,560, ,098,372 No of Share Capital Retained Shares capital reserves earnings Total $ $ $ $ Balance as at January 1, ,500,000 88,817,218 16,756, ,647, ,221,391 Total comprehensive income 94,169,292 94,169,292 Dividend paid (20,422,501) (20,422,501) Balance as at September 30, ,500,000 88,817,218 16,756, ,394, ,968,182 4

6 JETCON CORPORATION LIMITED Statement of Financial Position Third Quarter ended September 30, 2018 Unaudited Audited September 2018 September 2017 December 2017 $ $ $ ASSETS Property, plant and equipment 84,816,127 65,995,389 68,724,121 Inventories 422,574, ,206, ,821,450 Receivables 56,088,448 57,960,154 59,192,889 Investment 62,765 43,343 45,778 Cash and bank balances 30,792,561 35,504,477 14,843,025 Parent company 2,345,639 2,345,639 2,345,639 Total current assets 511,864, ,060, ,248,781 CURRENT LIABILITIES Payables 88,541,068 65,890,499 85,697,276 Short-term borrowings 171,254 5,904,859 6,588,492 88,712,322 71,795,358 92,285,768 NET CURRENT ASSETS 423,152, ,264, ,963,013 Long-term liabilities - 20,168,020 12,465, ,968, ,092, ,221,391 SHAREHOLDERS' EQUITY 507,968, ,092, ,221,391 5

7 Jetcon Corporation Limited Notes to the Financial Statements For the Third quarter ending September 30, IDENTIFICATION Jetcon Corporation Limited is incorporated and domiciled in Jamaica. Its registered office is situated at 2 Sandingham Avenue, Kingston 10, Jamaica, WI. The Company is listed on the Junior Market of the Jamaica Stock Exchange. The principal activity of the company is the importation of motor vehicles for resale in Jamaica. 2. STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION (a) Statement of compliance The interim financial report for the reporting period ended September 30, 2018 has been prepared in accordance with Accounting Standard IAS 34 Interim Financial Reporting. Changes in significant accounting policies relevant to the company s operations: IFRS 9, Financial instruments replaces the provisions of IAS 39 that relates to recognition, classification and measurement of financial assets and financial liabilities, derecognition of financial instruments, and impairment of financial assets. IFRS 9 replaces the incurred loss model in IAS 39 with an expected credit loss [ECL], which means that a loss event will no longer need to occur before an impairment allowance is recognised. The impact of the application of IFRS 9 is not considered material to the company s disclosure. The immateriality disclosure exemption under IAS 1 Presentation of Financial Statements, has been applied. The company applies the simplified approach permitted by IFRS 9, which requires that the impairment provision is measured at initial recognition and throughout the life of the receivables using the ECL. As a practical expedient, a provision matrix is utilized in determining the lifetime ECLs for trade receivables. The adoption of IFRS 9 from January 1, 2018 resulted in no adjustments to the comparative figures presented in the financial statements. Further, as stated above, the immateriality exemption under IAS 1 Presentation of Financial Statements, has been applied. 6

8 Jetcon Corporation Limited Notes to the Financial Statements For the third quarter ended September 30, STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION (continued) BASIS OF PREPARATION (b) Property, plant and equipment Items of property, plant and equipment are stated at cost and valuation less accumulated depreciation. Depreciation is recognized on profit or loss on the straight-line basis, over the estimated useful lives of property, plant, motor vehicles and equipment except for land and investment properties. (c) Borrowings Borrowings are recognized initially as the proceeds received net of transaction costs incurred and are subsequently stated at amortized cost using the effective interest method with any differences between proceeds net of transactions cost and the redemption value recognized in income along with regular interest charges over the period of the borrowings. (d) Inventories Inventories are valued at the lower of cost or net realisable value. 3. EARNINGS PER SHARE Earnings per share is based on 583,500,000 shares issued. 4. SHARE CAPITAL The company opted to be listed on the junior market of the Jamaica Stock Exchange on the 24 th of March In preparation for the listing, the share capital was restructured, resulting in the issue of 481,650 bonus shares, in addition, the authorized share capital was split into 300 million shares of no par value, resulting in the issued capital increasing to 150 million shares. In March the company issued 44.5 million shares to the public, bringing the total issued shares to 194,500,000 units and in 2018 the shares were split into 3 and brought the issued capital to 583,500,000 units. 5. ADJUSTMENT TO 2017 RESULTS 7 There were slight adjustments to some of the figures in the 2017 profit and loss statement and some items that were included in Receivables were reclassified to accounts payable subsequent to the release on the 2017 report.

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September 2017 Interim Results JAMAICAN TEAS LIMITED. Unaudited Consolidated Financial Statements Fourth Quarter (September 2017)

September 2017 Interim Results JAMAICAN TEAS LIMITED Unaudited Consolidated Financial Statements Fourth Quarter (September 2017) Jamaican Teas Limited Board of Directors Commentary Fourth quarter results