HONBUN reports 57% increase in nine months net profit

August 12, 2021

For the nine months ended June 30, 2021, Honey Bun (1982) Limited reported revenues of $1.56 billion, 25% up from $1.24 billion reported a year ago. For the quarter, revenues increased by 54% to $566.36 million (2020: $367.42 million). HONBUN noted, “The improvement was attributable to a number of factors, including the introduction of new products such as Cinnamon raisin loaf and the Hot dog roll.”

The Company had a 25% increase in cost of sales to close at $803.85 million (2020: $​643.37 million). Gross profit also went up 25% to $751.23 million relative to $600.03 million reported in the prior corresponding period. Gross profit for the quarter amounted $279.46 million (2020: $174.04 million).

The Company documented other gains for the nine months ended June 30, 2021 totaling $5.43 million relative to gains of $7.43 million for the similar period in 2020.

Administrative expenses rose 21% to $335.02 million (2020: $276.71 million) for the nine months, while selling, distribution and promotional expenses increased 9% to $207.88 million (2020: $190.16 million). Total expenses for the nine months amounted to $542.90 million, 16% above the $466.87 million recorded for the same period of 2020. For the quarter, total expenses closed at $198.38 million (2020: $153.96 million).

Despite the increased expenses year to date, profit from operations rose from $141.41 million in 2020 to $213.84 million for the period under review. Operating profit for the third quarter amounted to $82.68 million compared to $22.16 million reported for the same quarter in 2020.

Finance income totaled $81,963 (2020: $808,693), while finance costs fell 3% to $5.91 million (2020: $6.08 million).

Profit before taxation closed the period at $209.35 million versus $130.41 million booked in the same period last year. Pretax profit for the quarter amounted to $81.59 million (2020: $22.85 million).

Taxation for the nine months amounted to $32.88 million (2020: $17.75 million), thus resulting in net profit after taxation of $176.47 million (2020: $112.66 million). For the quarter, net profit increased to $64.89 million compared to $20.24 million reported in the previous comparable quarter.

Consequently, earnings per share (EPS) amounted to $0.37 (2020: $0.24) year to date, while for the quarter the EPS amounted to $0.14 (2029: $0.04). The trailing twelve months EPS is $0.49. The number of shares used in this calculation was 471,266,950 shares. HONBUN last traded on August 12, 2021, at $6.75 with a corresponding P/E ratio of 13.80 times.

Balance Sheet at a Glance:

As at June 30, 2021, total assets increased by 23% to close at $1.26 billion (2020: $1.02 billion). The increase was largely due to increases in ‘Cash and Cash Equivalents’ and ‘Investments’ which closed at $375.37 million (2020: $234.73 million) and $95.81 million (2020: $63.13 million), respectively.

Shareholders’ equity totaled $986.65 million compared to the $829.61 million quoted as at June 30, 2020. This resulted in a book value of $2.09 relative to $1.76 the prior year.


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