$500-m hit
Wisynco boss outlines estimate of lost sales due to supply chain issues
THE Wisynco Group has estimated that its sales during the April to June quarter might have taken a hit which could have ran into the hundreds of millions of dollars due to snags in the efforts to acquire raw material for production.
Andrew Mahfood, chief executive officer for the Wisynco Group, addressing the issue at the company’s recently held investors briefing, estimated that a fair estimate of lost revenue due to the supply chain issues “would be at least $500 million”.
Mahfood, however, pointed out in a follow-up call that the figure is just an estimate as it is hard to gauge lost revenues.
“Although I mentioned a figure of $500 million in the investor briefing, it is more a gut feeling, but we know we lost some ground [in sales] during the quarter.”
“We could have certainly sold more, if we were able to produce more,” he continued. “We weren’t able to get access to one of our key ingredients, carbon dioxide,” he added. Carbon dioxide is a key ingredient in the production of carbonated beverages, giving the drinks their fizz.
“We had challenges around CO2 in that last quarter and it affected what we could produce which affected how much we could have sold.”
That apart, Mahfood revealed that Wisynco is in acquisition mode, though he said nothing is close to being announced at the moment.
“We are very acquisitive. In fact, we have been looking at a lot of things over the last couple of months. Nothing has materialised as yet. One of the things we are very cautious about as a management team, is that we don’t want to push ourselves to make an acquisition that doesn’t make any sense or is not great value for shareholders,” Mahfood told investors.
He added: “While we have them under review, we have to just keep that review going and hopefully, one or two or three... great acquisitions come up.”
At the end of its financial year on June 30, Wisynco had $7.5 billion worth of cash on its books. Mahfood said some of the money would be deployed for acquisition as soon as a suitable target is identified.
Other sums will also be spent to expand the company’s product offerings.
“While some of the capital expenditure will shore up our organic production, we are also going into some new products in the next 18 months. and we have started those investments now,” Mahfood explained as he outlined that the new products will mostly be beverages.