EFRESH reports 97% decline in first quarter net profit

Date: May 15, 2019

Everything Fresh (EFRESH) for the three months ended March 31, 2019 reported total revenues of $593.18 million, a 25% increase on the $474.62 million reported for the prior period in 2018.

Cost of sales for the period increased 24% to $515.16 million relative to the $416.93 million booked the corresponding period in 2018. As such, gross profit for the period amounted to $78.03 million, a 35% improvement on the $57.69 million reported in 2018.

The Company reported other operating income of $183,000 for the period, 34% more than the $137,000 reported for the corresponding period last year.

Total operating expenses increased 84% for the three months, to total $76.01 million versus $41.22 million documented in the prior comparable period in 2018. Of this, administrative expenses surged 98% to $75.93 million (2018: $38.40 million) while selling and promotional expenses closed at $78,000 (2018: $2.82 million). Management noted that, “this was due mainly to the increase in human resources costs which took place in the second half of 2018 and the first quarter of 2019.”

As such, the Company booked operating profit of $2.20 million, a 87% decline on the $16.60 million recorded for 2018’s corresponding period. Finance costs totalled $1.90 million (2018: $3.99 million).

EFRESH reported profit before tax of $301,000 compared to profit before tax of $12.62 million in 2018, a 98% decline. No taxes were incurred for the quarter, resulting in net profit of $301,000 versus profits of $12.02 million in March 2018.

Consequently, earnings per share (EPS) for the period amounted to $0.0004 (2018: $0.02). The trailing twelve months EPS is $0.006. The total amount of shares outstanding used for this calculation was 780,000,000 units. Notably, EFRESH closed the trading period on May 14, 2019 at a price of $1.56.

The Company indicated that, “the acquisition of the assets of The Meat Experts Limited was completed in January 2019. This acquisition has increased the product offering of the Company to its existing customers as well as adding new clients.”  The division had low start-up costs for the quarter due to selling items at a discount as well as honouring existing contracts.  Nevertheless, the company was able to increase prices  to ‘desired level by the end of the quarter’ through negotiations.  EFRESH Further noted that, “the company expects to continue to grow the sales of its Meat Experts division to improve the utilization of the Factory and absorb the associated overhead costs of the plant.”

Balance Sheet Highlights:

As at March 31, 2019, total assets amounted to $829.81 million, 75% more than last year’s $473.05 million in 2018. This was attributed to a rise in ‘Cash and short-term deposits’ and ‘Property, plant and equipment’ which closed at $136.43 million (2018: $39.54 million) and $106.50 million (2018: $34.39 million), respectively.

Shareholder’s Equity increased by 145% for three months period, totalling $623.59 million compared to the previous year’s total of $255.03 million, this resulted in a book value per share of approximately $0.80 relative to $0.33 in 2018.



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