EFRESH reports $40.07 million Net Loss for Nine Months Ended

November 14, 2019

Everything Fresh Limited (EFRESH), for the nine months ended September 30, 2019, Revenue grew by 18% amounting to $1.64 billion, up from $1.39 billion reported a year ago. The third quarter reported revenues of $525.17 million, a 24% increase when compared to the $421.96 million for the corresponding period last year.

Cost of sales closed the period at $1.43 billion (2018: $1.22 billion) which translated into a 21% improvement in the company’s gross profit to $204.10 million (2018: $168.47 million). For the third quarter, gross profit increased significantly by 156% to $73.18 million in 2019 relative to $28.62 million in 2018.

Other operating income saw an increase of 10% to $1.56 million from $1.42 million.

Operating expenses totalled $233.99 million, 86% more than the $125.70 million booked the previous year. Of this, administrative expenses rose to $233.74 million (2018: $116.30 million) and selling and promotion expenses fell to $247,000 from $9.40 million in 2018. Thus, operating loss for the period amounted to $28.33 million relative to an operating profit of $44.19 million

Finance costs of $11.73 million was reported for the nine month period relative to $10.42 million reported last year. Thus, Loss before tax was $40.07 million for the period relative to a profit before tax of $33.77 million in 2018.

No tax was booked for the nine months ended September 30, 2019, whereas taxation of $8.27 million was charged a year before. Consequently, net loss amounted to $40.07 million compared to net profit of $25.50 million for the corresponding period in 2018. However, for the third quarter a net loss of $11.56 million was booked compared to a net loss of $17.53 million in the previous year. EFRESH stated, “the traditional distribution segment of the Company continues to thrive with a pre-tax profit of $36.7 million for the nine months representing an increase of 9.0% over the $33.8 million earned for the comparative nine months of the previous year. However, the Meat Processing made a loss of $76.8 million for the first nine months of 2019. Therefore, the Company made an overall loss of $40.1 million for the nine months ended 30 September 2019. This is mainly a result of the underutilisation of meat Processing Plant as the gross margins are yet at the breakeven point.”

Consequently, loss per share (LPS) amounted to $0.05 (2018: EPS of $0.03) while loss per share for the quarter amounted to $0.0148 versus a LPS of $0.0225 in 2018. The twelve months trailing LPS is $0.063. The number of shares used in this calculation was 780,000,000 shares. EFRESH stock price closed the trading period at a price of $1.23 on November 14, 2019.

The Company noted, “the amounts shown in comprehensive Income for 2019 include results from the Meats Processing division which began operations on 1 January 2019 and therefore the comparative amounts from 2018 relate only to the traditional Distribution division.”

Balance sheet at a Glance:

Total Assets grew by 1% or $5.93 million to close at $843.65 million as at September 30, 2019 (2018: $837.72 million). This increase in total assets was largely due to a 48% increase in ‘Inventories’ which closed at $325.47 million (2018: $220.03 million) as well as a 164% increase in Property, Plant and Equipment which closed at $135.42 million (2018: $51.35 million).

Shareholder’s equity totalled $583.22 million compared to the $633.27 million for 2018. This resulted in a book value of $0.748 (2018: $0.812).

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