November 14, 2022

Consolidated Bakeries (Jamaica) Limited (PURITY), for the nine months ended September 30, 2022 recorded a 31% increase in revenue to $1.04 billion from $798.88 million reported for the corresponding period in 2021. For the third quarter, the company recorded a revenue of $322.81 million (2021: $266.57 million), representing a 21% increase.

Cost of sales for the period rose by 31% to close at $637.07 million (2021: $486.42 million), leading to a gross profit of $405.75 million (2021: $312.46 million). Within the quarter, PURITY recorded cost of sales of $206.38 million, up 28% relative to $160.96 million booked at the end of the third quarter for 2021. As such, third quarter’s gross profit totalled $116.43 million, up 10% year over year (2021: $105.60 million).

The Company reported total expenses of $379.01 million, a 22% rise when compared to the $311.30 million reported in 2021. Of this, administrative expenses amounted to $200.41 million, up 13% relative to $177.81 million reported in 2021. Selling Expenses went up by 39% to close at $152.46 million (2021: $109.39 million). Total Expenses for the third quarter amounted to $127.34 million relative to the $105.33 million booked in 2021.

This resulted in an operating profit of $26.75 million for the nine-months period, compared to an operating profit of $1.15 million documented for the comparable period in 2021. For the third quarter, Operating Loss amounted to $10.91 million relative to an Operating Profit of $278,828 booked in 2021.

Finance Cost rose by 38% to close at $13.03 million versus $9.43 million booked twelve months earlier. Interest and other income closed the period at $1.72 million, 37% above the $1.26 million recorded for the nine months ended September 30, 2021.

Consequently, PURITY recorded Pre-tax profit of $15.43 million compared to a Pre-tax loss of $7.02 million in 2021. Pre-tax loss for the quarter closed at $14.49 million in 2022 compared to a Pre-tax loss of $2.61 million in the previous corresponding quarter.

No taxes were incurred for the period under review, resulting in a net profit of $15.43 million versus a profit of $7.02 million last year. For the third quarter, the Company booked a net loss of $14.49 million in contrast to a loss of $2.61 million for the corresponding quarter in 2021.

As a result, earnings per share (EPS) for the nine-months amounted to $0.07 compared to a loss-per-share (LPS) of $0.03 reported in 2021. For the quarter, the loss-per-share totalled $0.07 relative to a LPS of $0.012 in 2021. The twelve-months trailing EPS is $0.02. The number of shares used in our calculations is 222,709,171 units. PURITY stock last traded on November 11, 2022 at $2.54 with a corresponding P/E ratio of 117.39 times.

Balance Sheet at a glance:

PURITY, as at September 30, 2022, recorded Total Assets of $1.07 billion, an increase of 6% year over year when compared to $1.01 billion booked last year. The increase was attributed mainly to a 76% increase in ‘Inventories’ which closed at $87.85 million (2021: $49.85 million)..

The company closed the period with Shareholders’ Equity in the amount of $698.52 million (2021: $688.21 million). As a result, the company now has a book value per share of $3.14 (2021: $3.09).

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