Montego Bay based distribution company, Caribbean Producers Jamaica Limited (CPJ) ended its 2021 financial year in June on a sour note with net losses amounting to US$2.52 million.

However this is an improvement on the net loss of US$4.35 million booked in 2020 following tax benefit of US$1.20 million that said year.

On the other hand, Caribbean Producers Jamaica, which is listed on the Jamaica Stock Exchange reported net profit of US$1.27 million for the quarter ended June 2021 relative to a net loss of US$4.35 million booked last year.

Net losses attributable to shareholders for 2021 amounted to US$2.26 million, down from the net loss attributable to shareholders of US$4.07 million booked twelve months earlier. As a result, loss per share (LPS) for the year amounted to US$0.2058 cent compared to LPS US$ 0.3698 in 2020.

Revenues went down in 2021

Caribbean Producers Jamaica experienced a 37% decline year on year in gross operating revenues to close the year in June at US$58.18 million compared to the US$91.70 million for the prior year.  For the fourth quarter in June, the company posted a whopping 264% increase in revenues to close the year at US$21.07 million relative to US$5.78 million for the same quarter of 2020.

The company’s management has highlighted that the revenue declined due to “the closure of hotels in March 2020.” The management pointed out that “the Group had projected US$120 million in sales for the FY 2020 prior to the pandemic” noting that the revenue decline was due to “the closure of hotels in March 2020.”

The management added that, “the improvement in revenue for Q4 was the direct result of an easing in travel restrictions and increase in tourist arrivals, as the vaccination drive in many countries boosted traveller confidence.” Cost of operating revenue showed a 40% decrease closing the period at US$42.46 million relative to US$70.93 million for the previous year.

For the June fourth quarter Caribbean Producers Jamaica recorded a 134% increase in cost of operating revenue to close the year at US$15.25 million relative to US$6.53 million for the comparable period in 2020.

Consequently, the company recorded a 24% decline in gross profit to US$15.71 million (2020: US$20.77 million). The last quarter incurred a gross profit of US$5.81 million relative to a gross loss of US$742,770 in 2020.

Drop in selling and admin expenses

Selling and administrative expenses totaled US$13.11 million, representing a 32% decrease from the US$19.27 million posted last year. Depreciation for 2021 was US$4.19 million when compared to the corresponding prior year of US$4.34 million.

Expected Credit losses US$74,820 (2020: US$443,496). Other operating income totalled US$1.32 million; this compares with other operating income of US$128,448 booked a year ago. Operating loss totalled US$335,450 relative to operating loss of US$3.15 million in 2020.

Finance income amounted to US$33,099 (2020: US$3,724), while Finance cost was US$2.22 million (2020: US$2.41 million). As such, loss before taxation was US$2.52 million compared to a loss of US$5.55 million in 2020.

According to Caribbean Producers Jamaica, 2021 “has been a year and a half since COVID-19 began its unprecedented impact on the global economy. COVID-19 continues to disrupt and dictate global economic activities, especially the travel sector and global supply chain industry. Management expects that challenges will continue in supply chain for the short to medium term. Based on improvements in the dissemination of vaccine in Europe, the US and Canada, our main travel partners. Management is confident that thus points to a strong rebound in tourism.”

The company explained that, “the upward trend has continued into the new fiscal year with unaudited July Group revenues of US$9.4 million and CPJ (Caribbean Producers Jamaica) revenues of US$7.6 million. The company is projecting that this upswing is the result of a pivotal turn in tourism and will be a continuing trend.

Monitoring impact of new Delta variant of COVID-19

Caribbean Producers Jamaica is closely monitoring and assessing the impact of the new Delta variant of the coronavirus. “The management of CPJ is cautiously optimistic that changes in restrictions will not lead to any further travel bans or closures of hotels, nor in any way impact or slow the recovery of the sector,” the company has reported.

Furthermore, the management of CPJ has “implemented and embraced strategies to mitigate against the risk of COVID-19. One such example is the development of new sales strategies to improve market share in the retail channel, including expanded product lines. A new and improved online store and expansion of the CPJ Market in Montego Bay. Construction of the 6000 sq. foot store started in July and is estimated to open early next year.”

Caribbean Producers Jamaica has highlighted that “management is committed to continue its pursuit of cost saving initiatives and operational efficiencies through improvements in IT systems relating to supply chain processes, distribution and warehouse management. As part of that commitment and despite the pandemic, the CPK Group invested more than US$1.8 million in capital expenditure during FY ending June 2021. Processes and initiatives implemented during the course of the last eighteen months have resulted in a material reduction in costs of operation at CPJ.”

Balance Sheet Highlights

As at June 30, 2021, CPJ’s total assets amounted to $66.33 million, a 10% increase year over year from the $60.56 million as at June 30, 2020. The increase was due mainly to an increase in ‘Accounts receivables’ which rose 84% to US$15.39 million versus US$8.39 million reported in 2020.

Right of Use also contributed to the upward movement in the asset base with a 56% increase to US$11.53 million from US$7.39 million in 2020.

Shareholder’s Equity as at June 30, 2021 totalled at US$15.64 million (2020: US$17.91 million) resulting in a book value per share of approximately US1.422 cents (2020: US1.628 cents).