April 15, 2020
Everything Fresh Limited (EFRESH) for the year ended December 31, 2019 revenue grew by 17% for the period amounting to $2.20 billion, up from $1.88 billion reported a year ago. For the fourth quarter, revenues totaled $563.04 million, a 15% increase when compared to last period’s $489.07 million.
Cost of sales closed the period at $1.95 billion (2018: $1.66 billion) which translated into a gross profit of $256.35 million (2018: $218.71 million). For the fourth quarter, gross profit increased 4% to $52.25 million relative to $50.24 million in 2018. The Company noted, “The pressure on margins in the traditional Distribution Division in the last quarter is a result of having fixed contract pricing with customers through the end of 2019. As a result, rising costs associated with stock arriving in the last quarter had a downward impact on margins.”
Other operating income declined by 26% for the period to $1.64 million from $2.22 million reported the prior year. While, for the quarter, other operating income closed at $84,000 (2018: $794,000).
Operating expenses totaled $338.60 million, 79% more than the $188.64 million booked the previous year. Of this, administrative expenses rose to $336.91 million (2018: $177.99 million), while selling and promotion expenses closed at $1.68 million (2018: $10.65 million).
Operating loss amounted to $80.61 million versus operating profit of $32.28 million documented in the same period last year. For the quarter, operating loss of $52.28 million was booked compared to operating loss of $11.91 million documented in the prior comparable period. In addition, finance costs amounted to $23.06 million (2018:$13.53 million).
Loss before tax for the year ended December 31, 2019 totaled $103.67 million in comparison to 2018’s profit before tax of $18.76 million.
Tax credit of $20.15 million was reported for year-end relative to $2.42 million reported the previous year. As such, net loss of $83.52 million was booked for the period relative to net profit $16.34 million for the corresponding period in 2018. The company stated, “This is mainly a result of the underutilization of the Meat Processing Plant as gross margins were below the breakeven point. In addition to this, the price that the market demanded for pork products in particular, made it difficult to earn sufficient margins to turn a profit.” For the quarter, a net loss of $43.45 million was booked compared to a net loss of $9.16 million in the previous corresponding quarter.
Consequently, loss per share (LPS) amounted to $0.11 (2018: EPS $0.02) while loss per share for the quarter amounted to $0.06 versus a LPS of $0.01 in 2018. The number of shares used in this calculation was 780,000,000 shares. EFRESH stock price closed the trading period at a price of $0.95 on April 14, 2020.
Balance sheet at a Glance:
Total Assets increased by 12% or $2.06 million to close at $976.07 million as at December 31, 2019 (2018: $873.96 million). This was largely due to the $252.55 million increase in ‘Non-Current Assets’ which closed at $314.44 million (2018: $61.88 million). ‘Deposit on Investments’ and ‘Cash and Short-term Deposits’ tampered with movement due to the large reduction , reporting nil for 2019 (2018: $120.36 million) and $85.97 million (2018: $184.90 million), respectively.
Shareholder’s equity totaled $539.77 million compared to the $623.28 million reported the prior year. This resulted in a book value of $0.69 (2018: $0.80).
Analyst Certification -This research report is for information purposes only and should not be construed as a recommendation. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.