CFF reports 11% decline in net profit for the twelve months ended December 31, 2018

Date: March 01, 2019

Caribbean Flavours and Fragrances (CFF), revenues increased by 11% to $460.04 million relative to $413.04 million for the comparable period in 2017.

Cost of sales amounted to $301.84 million relative to $245.29 million in the prior corresponding period. Consequently, gross profit fell to $158.20 million for the period under review, compared to the prior year’s figure of $167.75 million.

The Company recorded a year over year increase in total expenses to $101.77 million, up from $97.42 million in 2017. There was a 21% decline in selling and distribution to total $5.15 million (2017: $6.52 million). Whereas, administrative expenses for the period went up by 6% to $96.62 million versus $90.91 million in the prior year’s corresponding period.

Consequently, profit from operations for the period closed at $56.43 million versus $70.33 million booked for the twelve months to December 2017.

As a result, after incurring taxation of $2.20 million (2017: nil), net profit for the period amounted to $73.41 million, representing an 11% decline from the comparable period’s figure of $82.50 million. Management noted, “A deliberate strategy to maintain sufficient inventory levels in order to better satisfy our customer’s requirements has allowed the Company to grow its revenues and profits. The securing of new markets for fragrances and increasing the volume of sales of flavours to existing customers and new customers in foreign markets has also contributed significantly in this regard.”

CFF also stated, “Based on the outlook for the coming year, it is expected that the company will continue to improve its profits whilst increasing its market share in both the domestic and overseas markets.”

The earnings per share for the period amounted to $0.82 (2017: $0.92). The number of shares used in this calculation was 89,920,033 units. As at February 28, 2019 the stock traded at $18.49.

 Balance Sheet Highlights:

The Company, as at December 2018, recorded total assets of $474.47 million, an increase of 17% when compared to $406.64 million for the prior year. ‘Inventories’ and ‘Receivables’ contributed to this growth, closing the period at $130.86 million (2017: $84.96 million) and $96.36 million (2017: $66.80 million), respectively. ‘Property, Plant and Equipment’ also contributed to the growth amounting to $21.20 million (2017: $15.45 million).

Total Shareholders’ Equity as at December 2018 closed at $427.16 million, an improvement of 14% from $373.07 million last year. This resulted in a book value per share of $4.75 (2017: $3.68).


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