ECL reports 58% decrease in year end net profit

October 30, 2020

Express Catering Limited (ECL) for the year ended May 31, 2020 reported a 19% decrease in revenue to US$14 million (2019: US$17.32 million). Revenue for the quarter declined 79% to close at US$1.09 million relative to US$5.21 million reported the previous year.

Cost of sales (COS) decreased by 15% for the period to US$4.33 million (2019: US$5.07 million). However, gross profit decreased year-on-year by 21%, from US$12.25 million in 2019 to US$9.68 million in 2020. Gross profit for the fourth quarter declined significantly from US$3.39 million in 2019 to US$318,500, a 91% decrease year over year.

Total expenses decreased by 17% for the period in review to US$6.84 million, down from US$8.23 million booked for 2019’s year end. The decline was associated with a 42% reduction in administrative expenses to US$4.41 million from US$7.63 million booked in the same period last year. Depreciation and Amortization saw a drastic 329% increase to US$2.38 million compared to US$554,827 for the comparable period in 2019. Promotional expenses also saw a 4% decrease from US$47,794 in 2019 to US$46,034. Total expenses for the fourth quarter dropped 80% to close at US$437,276 (2019: US$2.19 million).

Consequently, operating profit for the period decreased by 30% to US$2.84 million (2019: US$4.02 million). Operating profit for the quarter totalled US$118,776 relative to US$1.21 million booked for the corresponding quarter of 2019.

Finance cost of US$1.29 million (2019: US$342,047) was incurred for the period and foreign exchange gain amounted to US$21,153 (2019: US$50,565).

Pre-tax profit for the year totalled US$1.56 million, a 58% decrease from US$3.73 million recorded for 2019. No tax was incurred for the period under review, as such net profit amounted to $1.56 million (2019: $3.73 million). For the quarter, net loss amounted to US$1.09 million versus a net profit of US$1.18 million booked for the comparable period in 2019.

Earnings per share (EPS) for the year ended totalled US$0.10 cents (2019: US$0.23 cents). Loss per share for the quarter amounted to US$0.07 cents (2019: EPS US$0.07 cents). The number of shares used in the calculation was 1,637,500,000 units. Notably, ECL’s stock price closed the trading period on October 29, 2020 at a price of J$3.72.

Balance Sheet Highlights:

The Company, as at May 31, 2020, recorded total assets of US$32.47 million (2019: US$8.53 million). Notably, Property, plant and equipment’ amounted to US$22.93 million (2019: nil) and ‘Owning by related companies’ was US$3.64 million (2019: US$1.53 million).

Total Stockholders’ equity as at May 31, 2020 closed at US$3.98 million (2019: US$3.21 million); this resulted in a book value of US$0.24 cents (2019: US$0.20 cents).


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