Fall off blamed on 72% decline in departing passengers at Sangster Airport

Express Catering Limited, which is the dominant food and beverage provider at the Sangster International Airport (SIA), has seen its revenues plummeting by 85 per cent to US$1.19 million for the six months ended November 30, 2020.

This big drop in revenues is being blamed on the 72 per cent fall off in departing passengers at the SIA in Montego Bay, St Jame. Revenues for the quarter fell 77 per cent to close at US$748,372 relative to US$3.28 million reported for the first two quarters of 2020.

The company reported revenues of US$7.81 million for all of 2019 but since then things have not been as before. Cost of sales plunged by 86 per cent for the six-month period to US$301,705. For the entire year of 2019, cost of sales amounted to US$2.13 million.

Deteriorating gross profit

As a result of the poor revenue outturn, gross profit nose-dived by 84 per cent for the six-month period to US$890,807. Gross profit for the second quarter deteriorated from US$2.38 million in 2019 to US$606,090.

In its latest quarterly report, Express Catering blamed the declining revenues and falling profits on the big drop in passengers coming through the SIA. Express Catering operates approximately 40 of the shops in the food court of the airport, which is the largest in the English-speaking Caribbean.

The airport food and beverage outfit operates several food franchises at Sangster, namely Jimmy Buffet’s Margaritaville, Moe’s Southwest Grill, International Dairy Queen, Quiznos, Auntie Anne’s. The list is completed by Nathan’s Hot Dogs, Cinnabon, Wendy’s, Starbucks and Domino’s. Local brands include Bobsled Café, Tastee Patties, Viva Gourmet, Grab N Go, and Groovy Grouper.

Express Catering also sells beer, wine, liquor, confectionery and nuts. The management stated that, “total departing passenger count for the quarter recorded a 76.2 per cent decline compared to the same period in the prior year…..The passenger count decline had a similar effect on revenue for the quarter”.

However, it was noted that, “there is an improving trend in departing passenger count as the first quarter was 88.83 per cent compared to 76.2 per cent in the current quarter.”

Other income grew to close the period at US$2,024 versus US$173 booked in the previous corresponding period.

For the quarter, Express Catering posted other income of US$2,007 versus other loss of US$7,364 recorded in the prior comparable quarter.

Containing expenses

The company reported success in containing expenses. Total expenses declined by a whopping 57 per cent for the period under review to US$1.92 million, down from the US$3.97 million booked for the six months ended November 30, 2019.

This decrease was associated with an even bigger cut of 78 per cent decrease in administrative expenses to US$792,021 coming from US$3.63 million posted in the six months ended November 30, 2019. However, depreciation and amortization saw a 267 per cent jump to US$1.13 million compared to US$306,929 for 2019.

Promotional expenses saw an 88 per cent decrease from US$30,668 in 2019 to US$3,814 documented in the period under review. Total expenses for the quarter fell 51 per cent to close at US$867,494.

Operating loss incurred

Consequently, operating loss amounted to US$1.03 million relative to an operating profit of US$1.71 million booked for the six months ended November 30, 2019. Operating loss for the quarter totalled US$259,397 relative to an operating profit of US$602,996 booked for the corresponding quarter of 2019.

Finance cost of US$628,800 was incurred, while foreign exchange gain for the six months amounted to US$2,966 compared to a loss of US$20,588 for the corresponding period in 2019. There was no tax incurred, as such, net loss for the period amounted to US$1.66 million, relative to the profit of US$1.53 million recorded for the first six months of 2019.

For the quarter, net loss amounted to US$571,047 versus the net profit of US$493,415 booked for the comparable period in 2019