Year-to-date revenues soared by 108% to J$440 million
Jamaican soap manufacturer, Blue Power Group has returned to profitability posting improved half year and second quarter performance for the period ended October 31, 2022.
The group earned year-to-date revenues of J$440 million, representing a spectacular growth of 108 per cent and year to date profits of J$16 million. For the October quarter, Blue Power generated revenues of J$225 million and earned net profit of J$9.5 million.
Blue Power delivered outstanding growth in sales volumes and revenues in line with its plan to develop and diversify its customer base. The company experienced revenue growth in all of its main product categories including its bath soap lines, specialty soaps and laundry soap business.
Revenue growth came from existing and new customers and saw the group gaining market share locally and re-enforcing its reputation as a leading private label manufacturer.
Return to profitability
Company Chairman Jeffrey Hall points out that, “the combination of improved sales volumes and increased selling prices allowed the group to return to operating profitability during the second quarter. Price increases were necessary to recover the lost margins arising from the dramatic increases in raw materials costs (particularly vegetable oils) and a spike in logistics costs (particularly for products originating in Asia)”.
He explains that the level of price increases was set to allow the business to maintain a strong competitive position and maintain the confidence of customers, noting that as raw material and logistics costs normalise, some continued improvement in profit margins is expected. According to Hall, “in addition, with the improving logistics environment we expect to be able to reduce inventory balances which were held at high levels to minimize the risk of missed sales due to stock outs”.
Blue Power pointed to a positive outlook for foreseeable future based on its plan for profitable business growth, driven by its commitment to efficiency and innovation. During the second Blue Power continued its capital projects to expand capacity and productivity and to give its manufacturing plant more flexibility in the sources of raw material, and ultimately to allow the business to secure export markets.
The operating projects now underway are expected to be completed during the financial year. The company expects to see the results of this investment in the second half of 2023 and beyond.
Hall boasted that the Blue Power balance sheet remain strong noting that its investment in Lumber Depot Limited, which is a significant part of its holdings, performed satisfactorily in the second quarter. He reported that Blue Power is well prepared to diversify the business through opportunistic investments in related businesses and in its real estate portfolio.