Revenues rose slightly but profitability inched downwards

Durrant Pate/Contributor

Jamaica-based food manufacturer Salada Foods’ new product line is reaping much dividends and has turned out to be its ‘saving grace’ during the third quarter ended June 30, 2022.

For the combined three quarters, Salada Foods recorded an eight per cent increase in turnover to close at J$963.62 million, up from J$890.03 million in 2021. As for the third quarter, revenues amounted to J$328.35 million, up from the 2021 booking of J$310.74 million, representing a six per cent growth year over year.

The management has pointed out that much of this growth “was buoyed by the successful product line extension launched during the period. The Flavoured Coffee line, including Coconut Cappuccino, Caramel and Cinnameg has been well received locally and distribution has commenced in key export markets”.

As a result, export sales are up by 6.5 per cent over the prior year strengthened by the rebound of key export markets including Canada.

Profitability took a slight hit

Net profit year-to-date fell by four per cent from J$115.41 million in 2021 to J$111.21 million in 2022. As for the quarter, net profit fell by 43 per cent from J$50.93 million booked in 2021 to J$28.97 million in 2022.

Net profit attributable to shareholders for the combined three amounted to J$111.21 million relative to J$115.41 million recorded twelve months earlier. Profit attributable to shareholders for the June quarter amounted to J$28.97 million (2021: J$50.93 million).

Profit before taxation fell by four per cent to J$148.28 million versus J$153.88 million booked in 2021. For the quarter, profit before taxation contracted by 43 per cent to close at J$38.63 million (2021: J$67.18 million).

Cost of sales for the period under review increased by eight per cent to close at J$669.79 million relative to J$619.36 million in 2021. As such, gross profit amounted to J$293.83 million, a nine per cent climb year over year from the J$270.68 million booked for 2021 corresponding period.

Supply price increases hurting

Other operating income for the nine months amounted to J$1.08 million relative to J$949,000 in 2021. The publicly traded company is hurting certain external factors such as supply chain challenges and the war between Russia and Ukraine.

According to the management, “the significant disruption of domestic and foreign supply chain persists. This has been further exacerbated by geopolitical conflicts, which have resulted in supplier price increases. However, we have refrained from passing the full extent of these increases to the consumer. Salada prides itself on its ability to provide a cup for everyone”.

Administrative expenses rose by 11 per cent to J$107.38 million for the nine months ended June 30, 2022 (2021: J$96.70 million). Also, selling and promotional expenses rose by 28 per cent from J$36.18 million in 2021 to J$46.45 million for the nine months ended June 30, 2022.

The company reported net finance income of J$7.20 million for the period, down from the J$15.13 million reported in 2021. As at June 30, 2022, total assets increased by four per cent or J$43.93 million to J$1.26 billion (2021: J$1.22 billion).

The growth in the asset base was primarily due to ‘Inventories’ which closed at J$560.56 million (2021: J$486.76 million). This was slightly offset by a 14 per cent decline in ‘Investments’ which closed at J$90.11 million (2021: J$104.80 million).

Shareholders equity as at June 30, 2022 amounted to J$1 billion (2021: J$964.49 million) resulting in a book value per share of J$0.96 (2021: J$0.93).