Durrant Pate/Contributor
Caribbean Cream’s second quarter performance fell short of expectation owing to production disruptions, which impacted sales, in particular.

For the second quarter ended August 31, sales were hampered by production disruptions due to the ammonia shortage in the previous quarter. The cost of sales for the half-year period February – August 2023 closed on J$860 million, down from J$904 million for the comparative period in 2022.

This represents a decline of J$44 million or 5.0 per cent. For the August 2023 second quarter, sales dropped to J$442 million, down $15 million or 3.0 per cent to J$456 million. Revenue for the August quarter was $646 million, slightly up from $645 million in the corresponding quarter of 2022. Half-year revenue amounted to $1.2 billion, which was similar to that of the six-month corresponding period of last year.

Lower operational cost

Caribbean Cream experienced a reduction in overall cost as result of the lower production levels and savings from lower usage of electricity in the production process. Gross profit, however, increased by 10% for the half year, realising J$390 million, up J$37 million over the corresponding period of the previous year.

For the quarter, gross profit was J$15 million more than that in the corresponding quarter of 2022, an increase of 8.0 per cent. Administrative and other operating expenses for the half year were J$380 million more than the corresponding period last year of J$345 million, an increase of 10 per cent.

For the quarter under review, expenses totalled J$201 million versus last year of J$181 million, an increase of 11 per cent. The increases were mainly due to higher costs related to staff, security, and bank borrowings associated with the funding of capital expenditure plan.

Higher profits for half-year

Notwithstanding, for the half-year ending August 31, the company achieved higher profits before taxation, recording J$12 million versus last year of J$9.7 million, or an improvement of 24 per cent over the corresponding period. Caribbean Cream is now focusing on upgrading its property plant and equipment (PPE) with the objective of improving efficiency and profitability.

The PPE has grown by 29 per cent over the corresponding period last year, increasing by J$382 million. The investments being made over the course of the year within the production facility are expected to increase production at lower costs, contributing to meeting market demand and customer satisfaction.