Durrant Pate/Contributor

Jamaican listed food distribution company Caribbean Producers Jamaica Limited (CPJ) is now profiting from its diversification programme, erasing the losses chalked up in 2021, due to the negative impact of the COVID-19 pandemic.

The company, which is a primary supplier of food to Jamaica’s hotel sector, particularly those on the north coast, is reporting a net profit of US$7.02 million for the nine months ended March 31, 2022, erasing the net loss of US$3.79 million during the comparable period last year.

CPJ, which is based in Montego Bay, posted net profit of US$1.60 million for the March 22 quarter compared to a net loss of US$998,942 in 2021.

This positive performance is a vindication of the diversification, which has taken place in recent time. According to the management, ”The group has strategically been focused on diversification of revenue streams with further investment in our stores and additional product lines for local consumption. The company continues to upgrade infrastructure, including our fleet, in anticipation of growth and to improve our service.”

Mid-summer opening for CPJ Market Drax Hall outlet

Additionally, the company is looking forward to the opening of its Drax Hall outlet in St. Ann in mid-summer 2022, as management intensifies its revenue stream diversification. The newly renovated and expanded CPJ Market in Montego Bay is now completed and has been well received.

In addition, CPJ has begun work on enhancing the food service product line in the CPJ Market in Kingston. The management is also focused on containing costs, while increasing income streams.

To this end, management reports that it “Continues to proactively engage in cost containment activities whilst implementing measures to enhance operating efficiencies to increase sales, market share and profitability. We are managing the increase in fuel and energy costs and evaluating an investment to increase the use of solar energy.”

Shareholders profiting

Net profit attributable to shareholders for the nine months amounted to US$6.80 million relative to the net loss attributable to shareholders of US$3.59 million reported in 2021. For the March quarter, net profit attributable to shareholders amounted to US$1.58 million relative to a loss of US$903,258 booked last year.

As a result, earning per share (EPS) for the nine months amounted to US$0.618 cents compared to a loss per share (LPS) of US$0.326 cents in 2021. EPS for the quarter amounted to US$0.14 cents relative to a LPS of US$0.08 cents last year.

CPJ recorded a 179 per cent increase in gross profits to US$27.61 million for the nine months ended March 31, 2022. Gross profits for the quarter also grew amounting to US$8.86 million up from the US$3.53 million posted in 2021.

Selling and administrative expenses were US$14.69 million, a 57 per cent increase on the US$9.37 million posted for the prior year. Depreciation rose marginally by one per cent closing the period at US$3.21 million (2021: US$3.18 million).

Finance costs amounted to US$2.29 million (2021: US$1.34 million). Finance income close at US$4,814 (2021: US$24,534).

Considerable growth in revenues

Revenues at the company have been climbing considerably increasing by 133 per cent during the combined three quarters from US$37.11 million in 2021 to close the period at US$86.44 million. For the third quarter, CPJ posted a 123 per cent increase in revenues to close at US$28.36 million relative to US$12.72 million for the same quarter of 2021.

However, management points out that, “Despite the positive results the quarter started slowly, due to the uncertainty around the Omicron surge which interrupted worldwide travel, most notably in January and February 2022. There was a significant increase in tourist arrivals in March, resulting in a solid sales performance for the third quarter.”

Cost of operating revenue showed a 116 per cent increase closing the period at US$58.83 million relative to US$27.21 million for the corresponding period in 2021. For the quarter, the company recorded a 112 per cent increase in the cost of operating revenue to close at US$19.50 million relative to US$9.19 million for the comparable period in 2021.

As at March 31, 2022, CPJ’s total assets amounted to US$78.57 million, a 44 per cent increase from the US$54.67 million booked in 2021. The growth year over year was linked to the upward movements in ‘Inventories’ which amounted to US$29.98 million and ‘Account Receivable’ which ended at US$19.29 million.

Shareholder’s Equity totalled US$22.44 million (2021: US$14.32 million), resulting in a book value per share of approximately US$2.04 cents (2021: US$1.30 cents).