HONBUN reports 27% decline in net profit for the first quarter

February 13,2018

Honey Bun Limited (HONBUN) for the three months ended December 31, 2017 reported total revenue of $322.83 million, a 3% or $10.38 million increase when compared with the $312.44 million reported for the corresponding period in 2016.

Cost of sales rose by 3% to total $178.87 million for the quarter relative to $173.80 million reported for the same period in 2016. As a result, gross profit increased 4% for the three months ended December 2017, to total $143.96 million relative to the $138.64 million recorded for the same period for the 206.

The company reported other loses of $323,500, a 156% or $197,000 increase when compared with the $126,340 loss booked in the same period for 2016. Finance income increased from $196,000 to total $314,000 for the period, a 60% increase year over year. As such, profit before expenses for the period increased 4% or $5.24 million to total $143.95 million.

Administrative expenses declined 1% for the period to total $60.16 million (2016: $60.84 million). Selling, distribution and promotion expense incurred by the company increased 53% or $17.61 million to close the period at $51.09 million (2016: $33.47 million). As such, total expenses for the period amounted to $111.24 million, an 18% increase relative to $94.31 million booked for the same period in 2016.

Finance costs totaled $1.29 million, up 16% compared to the prior year’s total of $1.11 million.

Pre-tax profits for the period amounted to $31.41 million, a 27% or $11.88 million decline relative to the $43.29 million reported for the corresponding period in 2016. HONBUN incurred tax expenses of $3.93 million for the 3 month period ended December 2017, relative to $5.40 million for same period in 2016.  Profit after taxation dropped 27% from $37.89 million for first quarter ended December 2016 to total $27.49 million for the first quarter in 2017.

Consequently, earnings per share for the quarter totaled $0.06 for the 3 months ended December 2017 relative to $0.08 for the same period of 2016. The twelve-month trailing EPS amounted to $0.18. The number of shares used in this calculation was 471,266,950 shares. Notably, the stock price for HONBUN closed the trading period on February 13, 2018, at JMD $5.17.

Balance Sheet at a glance:

As at December 2017, the company’s assets totalled $746.66 million, an increase of 16.76% compared to the $639.51 million reported as at December 2016. The growth was driven primarily by increases in ‘Investments,’ and ‘Intangible Assets’ to total $78.08 million and $2.44 million respectively.

Shareholders’ equity amounted to $573.32 million as at December 31, 2017 (2016: $509.16 million) resulting in a book value per share of $1.22 (2015: $1.08).

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