EFRESH reports six months net loss of $28.51 million

Date: August 15, 2019

Everything Fresh (EFRESH) for the six months ended June 30, 2019 reported total revenues of $1.11 billion, a 15% increase on the $968.64 million reported for the prior period in 2018. For the quarter, revenue totalled $520.54 million, 5% more than the $494.02 million reported for 2018’s quarter. EFRESH stated, “sales of the traditional business dipped by 7% versus the prior year as one of our major Hospitality Industry relationships closed for a major refurbishing exercise and will reopen early in the fourth quarter of this financial year.”

In addition, EFRESH stated, “the Company expects to continue to grow the sales of our Meat Experts division to improve the utilization of the factory and absorb the associated overhead costs of the plant.”

Cost of Sales for the period increased 19% to $982.81 million relative to the $828.43 million booked the corresponding period in 2018. As such, gross profit for the period amounted to $130.91 million, a 7% decline on the $140.21 million reported in 2018. Gross profit for the quarter fell by 36% to total $52.87 million, compared with the $82.52 million booked in prior quarter. “This was due to changes in the overall product mix. In the second quarter of 2019 the Company entered into a wholesale relationship with a new customer for a few select items. The sales to this customer represented new business, however the margins were reduced to facilitate the venture,” Management mentioned.

The Company reported other operating income of $1.53 million for the period, 269% more than the $414,000 reported for the corresponding period. For the quarter other operating income closed at $1.34 million (2018: $277,000).

Total operating expenses increased 91% for the six months ended, to total $156.27 million, $74.59 million above the $81.68 million booked for the corresponding period in 2018. Of this, administrative expenses advanced to $156.12 million (2018: $73.20 million), while selling and promotion expenses declined 98% to $151,000 (2018: $8.48 million).  “This was due mainly to an increase in human resource costs of $12.6 million which took place in the second half of 2018 and the first quarter of 2019. In addition, the increase in deprecation was due to increased capital expenditure, electricity increased due to increased refrigeration usage and exchange losses increased due to net foreign currency outflows that took place in the second quarter over a period when the Jamaican dollar weakened against the US dollar,” the Company highlighted.

The company reported Finance cost of $4.68 million,  39% decline on the $7.65 million reported in 2018.

As such, the Company booked loss before taxation of $28.51 million, relative to profit before tax of $51.30 million recorded for 2018’s corresponding period. However, for the quarter loss before taxation amounted to $28.81 million versus profit before tax of $38.68 million booked in the same period last year.

No taxes were incurred, relative to taxation of $8.27 million in the prior period, thus resulting in net loss for the six months of $28.51 million versus net profit of $43.03 million recorded for 2018. Net loss for the totalled $28.81 million relative to $30.41 million recorded for the prior year’s quarter.

Consequently, loss per share (LPS) for the period amounted to $0.04 (EPS 2018: $0.06), while loss per share for the quarter totalled $0.04 (EPS 2018: $0.04). The trailing twelve months LPS is $0.07. The total amount of shares outstanding used for this calculation was 780,000,000 units. Notably, EFRESH closed the trading period on August 14, 2019 at a price of $1.72.

Balance Sheet Highlights:

As at June 30, 2019, total assets amounted to $794.09 million, 11% less than last year’s $888.74 million in 2018. This was attributed to a decline in ‘Trade receivables’ and ‘Cash and Cash Equivalents’ to total $268.92 million (2018: $461.30 million) and $58.40 million (2018: $243.61 million), respectively.

Shareholder’s Equity decreased by 9% for six months period, totalling $594.78 million compared to the previous year’s total of $650.80 million, this resulted in a book value per share of approximately $0.76 relative to $0.83 in 2018.

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