98% decline in first quarter net profit
Arising from the frequency of raw materials prices going up, Caribbean Cream Limited will be reviewing the prices of its ice-cream and frozen novelties products more frequently.
The Jamaican listed company, which trades under the name KREMI, acknowledges the steady rise in inflation, which necessitated more frequent price reviews, as it continues to provide quality products to our customers. Given the prevailing conditions, KREMI disclosed that, “we have increased prices while we work to maintain volumes through greater on the ground presence and adaptive media programmes”.
KREMI is feeling the pinch from rising fuel costs, which has seen operating costs ‘going through the roof’. According to KREMI, “the main drivers for the higher costs were raw material price increases and higher utility costs as the company faced rapid and substantial price increases both locally and internationally… . Weekly fuel increases impact our utility costs, particularly, electricity, and drives up the cost of a wide range of our materials and services”.
Administrative expenses climbed nine per cent to close the first quarter ended May 31, 2022 at J$136.84 million, up from J$125.61 million during the comparable period in 2021, while selling and distribution costs fell by two per cent from J$15.22 million in 2021 to $14.94 million for the period under review.
Big drop in net profit
Net profit tumbled by 98 per cent during the first quarter coming from a profit of $54.16 million reported in 2021. Taxation amounted to J$189,312 relative to a charge of J$7.74 million in 2021.
Operating profit for the quarter amounted to J$13.42 million, down 80 per cent relative to J$66.70 million booked in 2021. Finance cost rose 139 per cent year over year to J$12.03 million relative to $5.03 million recorded in 2021.
KREMI saw a 45 per cent drop in interest income from J$229,852 reported in 2021 to J$127,501 in 2022. On the positive side revenues went up during the May quarter by 12 per cent to total J$611.75 million compared to J$548.45 million booked in the previous quarter.
Costs of sales amounted to J$447.36 million (2021: J$340.92 million), an increase of 31 per cent. Gross profit declined by 21 per cent or J$43.13 million to J$164.39 million compared to J$207.53 million for the quarter ended May 31, 2021.
KREMI’s assets totalled J$1.78 billion (2021: J$1.42 billion). The movement was largely due to an increase of J$388.16 million in ‘Property, Plant and Equipment’ to J$1.25 billion (2021: J$862.65 million).
Also contributing to the increase was ‘Account receivables’ which ended J$140.14 million relative to J$58.50 million reported in 2021. Shareholders’ equity amounted to J$799.83 million (2021: J$888.09 million), representing a book value per share of J$2.11 (2021: J$2.35).