Jetcon Corporation, a leader in pre-owned cars, anticipates that new car sales will constitute the majority of its revenue by 2025. According to its earnings release, Jetcon stated that resources will be “increasingly transferred” from used-car sales to new-car sales as “new sales pick up.”
Similarly, solar product sales continue to be positive, and combined with new car sales, the company expects this will form the “bulk of its revenue in the next 12 months”.
New car sales have a “much higher profit margins than that of used car sales” Jetcon.
The company made losses of $900,000 for the March 2024 quarter as it continues to feel the effects of a shift in the car buying economy.
On a positive note, the company cut its net losses “almost in half” compared to the same period in 2023 when it lost $1.76 million in the quarter.
“Banks continue to give more favourable lending rates towards the purchase of new cars than used cars, and this is reflected in the continuing stagnation of used car sales. We are therefore shifting focus towards the sale of new cars with the BAIC brand, and we have received positive feedback thus far with the models,” said the company in its earnings release.
Jetcon started marketing the Chinese brand BAIC, earlier this year. It is led by the BAIC B40, the competitor to the Jeep Wrangler which Jetcon markets. The company also imports crossover city SUVs from BAIC.
The sales were down to $135 million from $180 million a year earlier. The company continues to work through its inventory worth $400 million down from $420 million in December 2023. The inventory includes used and new vehicles, and solar products.
Receivables total $97 million and includes deposits on purchases of imports.
Jetcon accounts show virtually no long-term debt to fund its operations. It however ended the quarter with a negative cash balance of $1.2 million due to a bank overdraft compared to positive cash of $9.0 million a year earlier.
Meanwhile, its cost of Sales has decreased 37 percent, to $112 million from $154 million last year. Earnings per share total 0.15 cents, down from 0.30 cents last year.
