Lower levels of sales in region as American retail dries up
Jamaican soap and detergent manufacturer Blue Power group is facing fierce competition for its products in CARICOM, its main export market.
The situation has got so bad that the company is reporting lower levels of export sales in its just-ended October quarter. This has been compounded by the fact that retail sales for Blue Power soaps in the United States market have been drying up.
Blue Power Chairman Dr Dhiru Tanna pointed to the fact that export sales in the American market have not been doing well with sales drying up. According to Tanna, “we had shipped substantial quantities of soap to the United States in the first quarter in order to meet the demand from new customers such as Walmart, but the retail sales through these accounts were not sufficient enough yet to justify the same level of reorders”.
Tanna said that, during the just-ended October quarter, the warehouses of Blue Power American distributors had adequate stocks in inventory.
Tanna is anticipating that with the hiring of a new sales manager, sales will be improved in the coming months.
The company is also pinning its hopes on an uptick in sales in the upcoming Christmas season.
“We will begin the third quarter with the benefit of a sales manager who will help us improve our domestic sales and provide better coordination for export sales as we explore the avenues for the introduction of new products,” the Blue Power chairman advised.
35% INCREASE IN EXPORT SALES
For the October quarter, overall sales from continuing operations for the company was $151.99 million, which included the new sources of income not available in the previous year and represented an increase of 35 per cent over prior year.
Profit before tax was $22.38 million, which produced an overall profit of $16.78 million after the deduction of $5.60 million of estimated tax at the standard rate. For the six-month period, profits from continuing operations were $49.89 million, as compared to $51.58 million the previous year.
This includes a substantial provision for estimated credit losses and additional expenses for staffing the administration to handle the accounting functions of its subsidiary company, Lumber Depot Limited.
LOSING 10-YEAR JUNIOR MARKET TAX BENEFIT
Having graduated from the Junior Market of the Jamaica Stock Exchange as from April 2020, Blue Power is now operate without the incentives, which were provided for a 10-year period from the date that the company was accepted for listing on the Junior Market. As as result, Blue Power is now liable to the full rate of income tax, which is estimated in the unaudited financial statements presented.
Tanna sought to assure shareholders the company has taken the necessary steps to operate in the business environment brought on by the COVID-19 pandemic.
“We continue to remain vigilant with respect to the COVID virus and look forward to the return of normalcy as we send greetings to our customers and shareholders for a safe and healthy Christmas season,” the Blue Power chairman said.