May 14, 2020

Honey Bun (1982) Limited for the six months ended March 31, 2020 period reported revenues of $875.98 million, 13% up from $775.48 million reported a year ago. HONBUN stated that, “This was a result of increased capacity from production equipment upgrades.” For the quarter, revenues grew by 12% to $453.50 million (2019: $406.47 million).

The Company had a 13% increase in cost of sales to close at $449.98 million (2019: $​398.93 million). As such, gross profit went up 13% or $49.44 million year-to-date to $425.99 million relative to $376.56 million reported in the prior corresponding period. Gross profit for the quarter amounted $214.37 million (2019: $201.69 million).

The Company documented other loss for the six months ended March 31, 2020 totaling $1.75 million relative to gains of $7.03 million for the similar period in 2019. HONBUN reported other loss of $1.94 million for the quarter relative to gains of $5.21 million for the same quarter of 2019. Profit before operating expenses for the six months amounted $424.24 million (2019: ​$383.58 million) an 11% increase when compared to the same period in previous year.

Administrative expenses rose 26% to $183.70 million (2019: $145.54 million) for the six months, while selling, distribution and promotional expenses increased by 5% to $129.21 million (2019: $122.65 million). Total expenses for the six months amounted to $312.91 million, 17% above the $268.19 million recorded for the same period of 2019. For the quarter, total expenses increased by 18% to $157.86 million (2019: $133.30 million).

The increased expenses resulted in a 4% decline in profit from operations from $115.39 million in 2019 to $111.34 million for the period under review.

Finance income totalled $792,799 (2019: $727,042), while for the quarter, finance income closed at $67,540 (2019: $637,887). The six months finance costs rose by 15% to $4.57 million (2019: $3.96 million). As for the quarter, the finance cost increased 80% to close at $3.14 million (2019: $1.75 million).

As such, profit before taxation closed the period at $107.56 million versus $112.16 million booked in the same period last year. Pretax profit for the quarter amounted to $51.50 million (2019: $72.49 million).

Taxation for the six months amounted to $15.13 million (2019: $3.14 million), thus resulting in net profit after taxation of $92.42 million (2019: $109.02 million). For the quarter, net profit increased to $43.30 million compared to $70.92 million reported in the previous comparable quarter.

Consequently, earnings per share (EPS) amounted to $0.20 (2019: $0.23) year to date, while for the quarter the EPS amounted to $0.09 (2019: $0.15). The trailing twelve months EPS is $0.30. The number of shares used in this calculation was 471,266,950 shares. HONBUN last traded on May 14, 2020 at $5.05.

Balance Sheet at a Glance:

As at March 31, 2020, total assets increased by 22% to close at $1.07 billion (2019: $871.67 million). The increase was largely due to increases in ‘Cash and Cash Equivalents’ and ‘Receivables’ which closed at $258.05 million (2019: $165.62 million) and $119.14 million (2019: $62 million), respectively. ‘Inventories’ and ‘Property, Plant and Equipment’ also contributed to the increase closing at $94.05 million (2019: $60.59 million) and $529.12 million (2019: $494.99 million), respectively.

Shareholders’ equity totalled $809.37 million compared to the $712.75 million quoted as at March 31, 2019. This resulted in a book value of $1.72 relative to $1.51 the prior year.

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