Revenues up but profits

Durrant Pate/Contributor

Jamaican baking company, Honey Bun is reporting a mixed performance for its 2022 financial year in which revenues went up, but profits dwindled.

Honey Bun booked a 38 per cent increase in revenue to J$2.95 billion, up from the J$2.15 billion reported a year ago. For the fourth quarter, revenue climbed by 34 per cent, totaling J$790.50 million compared to J$590.32 million for the corresponding quarter in 2021.

The company saw a 58 per cent increase in cost of sales, which moved from J$1.12 billion a year ago to close the financial year at J$1.78 billion, which consequently led to a 15 per cent increase in gross profit to J$1.18 billion. For the last quarter, Honey Bun’s gross profit recorded a 18 per cent rise amounting to J$320.38 million compared to J$270.96 million in the prior year’s corresponding quarter.

Honey Bun reported other income of J$2.54 million, a J$2.24 million decline relative to the $4.78 million posted in the prior year.

PROFITABILITY SLIDE

Profit from operations declined by 13 per cent from J$285.12 million in 2021 to J$246.80 million for the year in review. After incurring taxes of J$50.96, net profit went down seven percent to J$203.49 million from the J$218.69 million reported in 2021.

The September fourth quarter saw net profit rising to J$65.41 million compared to J$42.22 million recorded for the corresponding quarter of 2021. Profit before taxation declined by 12 per cent to J$254.44 million compared to the J$290.20 million booked in 2021.

Administrative expenses rose by 32 per cent to J$531.03 million (2021: J$402.05 million), while Selling, Distribution & Promotion expenses increased by 17 per cent to J$408.06 million (2021: J$348.07 million). Total expenses for the year end amounted to $939.08 million, 25 per cent above the J$750.12 million recorded for the prior year.

For the fourth quarter, total expenses increased by 29 per cent to J$267.39 from J$207.22 million in 2021. Impairment gain on financial assets amounted to J$7.54 million relative to a gain of J$8.27 million booked 12 months earlier.

SURGE IN FINANCE INCOME

Finance income totaled $12.56 million, up by 118 per cet compared to J$5.77 million reported 12 months earlier. Finance costs increased by 108 per cent to close at J$3.26 million (2021: J$1.56 million).

Total comprehensive income for the year amounted to J$203.49 million relative to J$218.69 million in 2021. Consequently, Earnings per share (EPS) amounted to J$0.43 (2021: J$0.46) for the year end, while for the fourth quarter the EPS totaled J$0.14 (2021: J$0.09).

Total assets increased by 15 per cent to close at J$1.53 billion as at September 30, 2022 (2021: J$1.33 billion). The increase in total assets was mainly due to a 1,641 per cent increase in ‘Intangible Assets’ amounting to J$56.09 million (2021: J$3.22 million).

Taxation recoverable also contributed to the increase, closing at J$6.77 million (2021: J$4.03 million). Shareholder’s Equity totaled J$1.16 billion (2021: J$1.03 billion) posted as at September 30, 2022.

This translated in a book value of J$2.46 relative to J$2.18 in the prior year.