By Durrant Pate/Contributor

Contract furnishing company JFP Limited has seen a reverse in its profitability as it incurred a loss during its third quarter that ended in September. 

Net loss for the quarter closed on $75.4 million, reversing the net profit of $8.5 million made in the corresponding quarter of 2023. The company incurred a gross loss of $7.9 million, down from the gross profit of $58.3 million in the corresponding quarter of 2023. 

This period saw the completion of several design-build contracts that experienced cost overruns. as a result of these cost overruns for certain design-build contracts and the additional costs associated with the increase in the level of sales, the company’s cost of sales increased.

Cut in year-to-date losses

Year-to-date net loss amounted to $65.8 million, dipping below the $30-million loss recorded in the corresponding period last year. JFP’s gross profit margin declined from 53 per cent to 34 per cent due to increased cost of sales. 

Quarterly revenue declined by 71 per cent from $112.6 million to $32.7 million for the quarter under review compared to 2023. Sales declined primarily due to delays in the completion of several forecasted projects. 

At the same time, cost of sales declined by 25 per cent from $54.3 million to $40.7 million. Administrative expenses increased by 29 per cent from $43.5 million to $56 million, driven by increases in various operational costs such as insurance, salaries, and tools with a short lifespan.

Surge in expenses

Selling and distribution expenses surged by 178 per cent due primarily to increases in fees paid to commissioned sales agents. Finance costs increased by 85 per cent due to additional loans obtained this quarter. 

Operating expenses increased by 5 per cent due to increases in various operation costs including but not limited to insurance, salaries and tools. Property, plant, and equipment increased by 10 per cent moving from $78.1 million to $85.9 million, due to the purchase of tools and equipment that enhanced the production process.

Investments declined by 19 per cent, moving from $9.4 million to $7.6 million due to the reduction in the value of equity investments held. Inventory also decreased, dipping 32 per cent, from $117 million to $79 million. 

Other financial highlights

Receivables is up 56 per cent, jumping from $110 million to $171.7 million. Shareholder’s equity declined by 58 per cent, from $162.4 million to $67.6M million, due to the loss made this quarter. 

Non-current liabilities decreased by 34 per cent from $310.7 million to $204.8 million.