CFF reports 23% decline in first quarter net profit

Date: May 15, 2019

Caribbean Flavours and Fragrances (CFF) revenues increased by 27% to $112.58 million relative to $88.72 million for the comparable period in 2018. CFF stated that, “the Company’s positive growth was driven by a combination of strategies implemented both in the local and overseas market. CFF expects this trend to continue based on the pipeline of solutions that we are presently working on with these customers and in anticipation that they will be accepted and move from R&D into production.”

Cost of sales amounted to $75.29 million relative to $54.03 million in the prior corresponding period. Consequently, gross profit went up 8% to close at $37.29 million for the period under review, compared to the prior year’s figure of $34.69 million. Management noted that, “this continues to be heading in the right direction despite lower than anticipated sales of some new products during the quarter. We will continue with the refinement of our strategies and the improvement to our various cost structures in order to drive the desired efficiency whilst improving our cost of sales and gross profit.”

The Company recorded a year over year increase in total expenses to $26.14 million, up from $21.18 million in 2018. There was a 68%  decline in selling and distribution costs to total $297,000 (2018: $935,000). Whereas, administrative expenses for the period went up 28% to $25.84 million versus $20.25 million in the prior year’s corresponding period.

Consequently, profit from operations for the period closed at $11.15 million versus $13.51 million booked twelve months earlier.

Pretax profit closed at $14.45 million (2018: $15.42 million). As a result, after incurring taxes 2.51 million (2018: nil), net profit for the period amounted to $11.93 million compared to $15.42 million documented in the same period last year. CFF mentioned that, “the marginal reduction in profit is expected given the platform that the Company is working to ensure that it is more solution driven as well as its quest to gain acceptance in new markets such as Cuba whilst deepening its presence in many of the local and overseas markets. We expect that this will bear fruits in the short to medium term.”

The earnings per share for the period amounted to $0.13 (2018: $0.17). The twelve months trailing EPS is $0.78. The number of shares used in this calculation was 89,920,033 units. As at May 15, 2019 the stock traded at $16.50.

 Balance Sheet Highlights:

The Company, as at March 2019, recorded total assets of $466.13 million, an increase of 5% when compared to $442.95 million for the prior year. ‘Receivables and prepayments’ and ‘Short-term investments’ contributed to this growth, closing the period at $130.14 million (2018: $44.10 million) and $154.40 million (2018: $145.43 million), respectively. ‘Property, plant and equipment’ also contributed to this growth amounting to $21.46 million (2018: $14.90 million).

Total Shareholders’ Equity as at March 2019 closed at $439.09 million, an improvement of 13% from $388.45 million last year. This resulted in a book value per share of $4.88 (2018: $4.32).


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