However, this was due to the big one-off gain of $762 million last year

Jamaican manufacturing conglomerate, Seprod Group performed creditably during the September quarter and year-to-date performance, even though net profits went down during both periods.

During the third quarter ended September 30, 2021, the Seprod Group recorded net profit of $495 million, which represents a decline of $687 million or 58 per cent versus the corresponding period in 2020. However, this decline must be put in context, as in the corresponding quarter in 2020, Seprod recorded a one-off gain of $762 million from the sale of a property.

During the quarter ended September, 30 2020, Seprod disposed of property valued at $800 million, which was paid by way of shares issued to the Group by the purchaser. The Group then declared these shares as a non-cash dividend.

Assessing current performance in light of gain from the disposal of the property

With the exception of this one-off gain in the prior period, the net profit for the quarter in review represents an increase of $75 million or 18 per cent versus the corresponding period in 2020. The net profit of $1.70 billion for the year-to-date, represents a decrease of ($780 million) or 31 per cent versus the corresponding period in 2020.

With the exception of the aforementioned one-off gain in the prior period, the net profit for the year-to-date period represents a decrease of $19 million or one per cent versus the corresponding period in 2020. Revenues at the company are on the rise recording growth in both the September third quarter and year-to-date period.

For the third quarter the group achieved revenues of $11.32 billion, an increase of $1.27 billion or 13 per cent over the corresponding period in 2020. For the January-September year-to-date period, the Group achieved revenues of $31.15 billion, an increase of J$2.49 billion or nine per cent over the corresponding period in 2020.

Comment on Year-to-Date Performance

In commenting on the year-to-date performance, the management of the group explains that, “normalising for the one-off gain in 2020, the year-to-date profit performance (-1 per cent) showed improvement compared to the second quarter year-to-date results (-4 per ent and the first quarter year-to-date results(-14 per cent). The deficit at the beginning of the year has been progressively reduced through realignment of the cost structure and the partial pass through of higher commodity and logistics cost via price increases.”

The management highlighted that “the cost of goods has climbed considerably driven by global supply chain challenges and have remained stubbornly high. It is important to note that, while the cost of goods has risen by approximately 20 per cent, the company has decided to hold strain by absorbing some of the higher cost as we seek to support our consumers and customers through this challenging period”.

With regard to COVID management, Seprod has incurred significant cost as the group strives to create an environment that is safe for our employees, contractors, and other stakeholders noting that it has expended resources to educate, incentivise and facilitate our employees as the company seek to convince them to get vaccinated.

At this stage, 52 per cent of the workforce is vaccinated, which is still below the target of 75 per cent.

In the meantime, the management said it was focused on creating value by having a robust innovation pipeline, being a good corporate citizen and reorganising the business to not only survive but to thrive.

In concluding, the management advised that “the challenges are many but so are the opportunities, and we are committed to continuing our trajectory of delivering strong results and great shareholder value”.