Business
JM | Nov 30, 2021

Honey Bun reports 31% increase in year-end net profit

/ Our Today

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Net profit dropped for the 4th quarter

Baking company Honey Bun recorded a strong 2021 financial year, ending with net profits jumping by 31 per cent in spite of the setbacks caused by the COVID-19 pandemic.

Profit before taxation increased by 52 per cent to $290.20 million compared to $191.04 million booked in 2020. Profit before taxation for the fourth quarter in September amounted to $80.85 million (2020: $60.63 million).

Honey Bun incurred taxes of $71.51 million, thus resulting in net profit for the year $218.69 million, a 31 per cent increase relative to $166.75 million reported for 2020. For the fourth quarter, net profit fell to $42.22 million compared to $54.08 million recorded for the corresponding quarter of 2020.

This fall off in profit for the quarter was due mainly to the no-movement days imposed during the period to contain the COVID-19 spread.

Modest rise in revenues for the year

Honey Bun booked a 28 per cent increase in revenue to $2.15 billion, up from $1.67 billion reported a year ago. For the fourth quarter, revenue climbed by 37 per cent, totaling $590.32 million (2020: $431.38 million).

Honey Bun booked a 28 per cent increase in cost of sales to $1.12 billion, which consequently led to a 28 per cent increase in gross profit to close at $1.02 billion, up from the $799.27 million posted in 2020. For the last quarter, gross profit recorded a 36 per cent rise, amounting to $270.96 million compared to $199.24 million in the prior year’s corresponding quarter.

The company reported other income of $4.78 million, a $4.72 million decline relative to the $9.50 million posted in the prior year. Administrative expenses rose by 20 per cent to $402.05 million, while Selling, Distribution & Promotion expenses increased by 19 per cent to $348.07 million.

Total expenses for the year end amounted to $750.12 million, 20 per cent above the $626.23 million recorded for the prior year. For the fourth quarter, total expenses increased by 30 per cent to $207.22 million (2020: $159.36 million).

Impairment gain on financial assets amounted to $8.27 million relative to a gain of $11.75 million booked 12 months earlier. Profit from operations expanded by 47 per cent from $194.29 million in 2020 to $285.12 million for the year in review.

Big jump in finance income

Finance income totaled $5.77 million, up by 44 per cent compared to $4.02 million reported 12 months earlier while finance costs contracted by 17 per cent to close at $1.56 million (2020: $1.89 million). Increase in value of investments classified as fair value through profit or loss amounted $872,524, relative to a depreciation amount of $5.39 million recorded 12 months earlier.

Total comprehensive income for the year amounted to $218.69 million relative to $166.75 million in 2020. Total assets increased by 24 per cent to close at $1.33 billion as at September 30, 2021.

The increase in total assets was mainly due to a 36 per cent increase in ‘Cash and Cash Equivalents’ amounting to $404.25 million (2020: $296.98 million). Inventory also contributed to the increase, closing at $121.40 million coming from $71.27 million in 2020.

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