Thu | Jun 20, 2024

Wigton wins tax argument

Published:Sunday | June 9, 2024 | 12:07 AM
Wigton Windfarm CEO Gary Barrow.
Wigton Windfarm CEO Gary Barrow.

Renewable energy company Wigton Windfarm Limited says a 172 per cent spike in annual profit was mostly due to a tax windfall. Because of the tax credits, its earnings for year ending March 2024 shot from $308 million to $839 million. Gary Barrow,...

Renewable energy company Wigton Windfarm Limited says a 172 per cent spike in annual profit was mostly due to a tax windfall.

Because of the tax credits, its earnings for year ending March 2024 shot from $308 million to $839 million.

Gary Barrow, who just took over as CEO of Wigton in the wake of the departure of long-time head Earl Barrett, declined to comment other than to acknowledge that the rebate helped to beef up Wigton’s bottom line.

On the face of it, Wigton, which operates a wind farm in central Jamaica and sells power to the national grid, was on its way to posting lower profit for FY2024 due to lower revenue.

For the full year, ending March, sales revenue dipped seven per cent to $2.06 billion from $2.22 billion the prior year. Further bogged down by higher expenses, Wigton also reported less operating profit in the period.

The wind farm’s debt-servicing charges were slightly less but still above $400 million, while losses from associate company Flash Motors were unchecked, all leading to pretax earnings of $481 million. However, while sizeable, that outturn was 24 per cent less than the $636 million of pretax profit reported in 2023.

Half of the 2023 earnings was surrendered to tax collectors as corporate income tax, amounting to $328 million. But in 2024, there was a shift in the wind and Wigton booked tax credits of $358 million, instead, despite its positive earnings.

The company said it managed to convince Tax Administration Jamaica that it was a tax-exempt entity prior to its public listing on the stock market in May 2019. TAJ having agreed, it put the energy company in line “for the refund of income taxes previously paid, and as such, a tax-recoverable amount of $282,966,000 was recognised and is presented as part of tax-recoverable balances as at 31 March 2023,” Wigton reported in its year-end accounts.

Barrow reaffirmed that Wigton wants to move away from sole dependence on wind-power generation by diversifying into areas that can drive revenue growth.

“We want to look at ever-evolving opportunities in the energy ecosystem. There is a lot of excitement, and so we really want to grow through diversification,” he said.

To reach its goal, Wigton will be assessing its organisational structure, its processes and systems, and how to become more competitive, Barrow said.

neville.graham@gleanerjm.com