EFRESH reports 34% fall in nine-month profits

Date: November 13, 2018

Everything Fresh Limited (EFRESH), for the Nine Months Ended September 30, 2018, Revenue grew by 2% amounting to $1.39 billion, up from $1.37 billion reported a year ago. The third quarter reported revenues of $421.96 million, a 6% decline when compared to last period’s $450.23 million.

Cost of sales closed the period at $1.27 billion (2017: $1.26 billion) which translated into a 10% improvement in the company’s gross profit of $118.02 million (2017: $107.99 million). For the third quarter gross profit fell by 68% to $11.37 million in 2018 relative to $35.61 million in 2017.

Other operating income saw a decrease of 48%, falling to $1.04 million from $2.01 million.

Operating expenses totaled $92.71 million, 24% more than the $75.01 million booked the previous year. Of this, administrative expenses rose to $79.30 million (2017: $61.97 million), while finance costs of $13.41 million (2017:$13.05 million) was reported for the nine month period.

Profit before tax declined by $7.64 million for the period totaling $27.34 million in comparison to 2017’s $34.98 million.

Taxes of 8.27 million were charged resulting in a net profit of $19.08 million compared to $28.72 million for the corresponding period in 2017. However, for the quarter a net loss of $17.53 million was booked compared to a net profit of $9.28 million in the previous year. EFRESH stated, “margins contracted because of temporary competitive pressures.”

Consequently, earnings per share (EPS) amounted to $0.02 (2017: $0.04) while loss per share for the quarter amounted to $0.022 versus an EPS of $0.012 in 2017. The twelve months trailing EPS is $0.04. The number of shares used in this calculation was 780,000,000 shares. EFRESH stock price closed the trading period at a price of $1.96 on November 13, 2018.

Balance sheet at a Glance:

Total Assets grew by 71% or $338.03 million to close at $812.96 million as at September 30, 2018 (2017: $474.93 million). This surge in total assets was largely due to the $242.59 million increase in ‘Cash and Cash Equivalents’ which closed at $272.29 million (2017: $29.71 million). Property, Plant and Equipment also contributed to the increase with management indicating, “increases in Property, Plant and Equipment moved from $31 M at the beginning of the financial year to $54 M, as the company increased its fleet of motor vehicles and expanded its cold room facility.”

Shareholder’s equity totaled $633.27 million compared to the $234.44 million quoted as at September 30, 2018. This resulted in a book value of $0.81 (2017: $0.30).

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