November 11, 2022
JFP Limited (JFP)
Unaudited Financials for the nine months ended September 30, 2022:
JFP Limited (JFP), for the nine months ended September 30, 2022 recorded a 57% or $118.95 million increase in revenue from $209.73 million in 2021 to $328.69 million in 2022. Cost of sales however reduced by 1% to $116.28 million (2021: $116.88 million). Management noted that, “The increase in year to date and quarterly comparatives was due to completion of orders previously secured as well as JFP’s capability to streamline operational processes in meeting customers deadlines.”
The growth in revenue led to a significant rise in JFP’s nine months gross profit, which rose to $212.41 million from $92.86 million in 2021.
Other income closed the nine-month period at $131,116 down 99% from $20.13 million booked twelve months earlier. Management noted, “This was due to losses from the investment from the currently held at GK Capital which were as a result of the devaluation of the equity investments held, as well as the sale of a portion of the equity investments to fund cash flow.”
However, total operating expenses grew by 56% to $157.63 million (2021: $101.16 million). Of total expenses, administrative and selling & distribution expenses grew by 48% and 224% respectively, to $142.95 million (2021: $96.62 million) and $14.68 million (2021: $4.54 million) respectively. JFP mentioned that the increase in administrative expenses was due to, “primarily to increased staff costs as we continue to build our capacity to support continued growth in our operations. Our overtime expenses increased significantly within the quarter in order to respond to both our challenge of acquiring additional skilled laborers as well as our need to complete our projects on time. We have also continued with the quarterly incentives to our staff in the form of a productivity grant award.”
This resulted in an operating profit for the period of $54.90 million, relative to an operating profit of $11.83 million reported in 2021.
Net finance Costs reported were $11.77 million (2021: $7 million). Of net financial cost, finance cost amounted to $11.82 million (2021: $7.05 million) and financial income $47,796 (2021: $49,411).
JFP’s profit before tax grew to $43.13 million (2021: $4.83 million), there was no taxation for the period under review (2021: $1.30 million). As a result, nine months net profit closed $43.13 million (2021: $3.53 million). For the quarter, net profit closed at $7.54 million versus net profit of $15.92 million in the prior comparable period.
Based on current earnings, JFP reported an earnings per share (EPS) of $0.04 compared to an earnings-per-share (EPS) of $0.003 reported in 2021. For the quarter, EPS totalled $0.007 (2021: EPS of $0.01). On twelve-months trailing basis JFP output an EPS of $0.04. The number of shares used in our calculations is 1,120,000,000 units. JFP stock last traded November 10, 2022 at $1.83 with a corresponding P/E of 42.76 times.
Balance Sheet at a glance:
As at September 30, 2022, JFP had Total Assets of $559.76 million (2021: $362.77 million), reflecting a 54% year over year increase. The primary increase in the asset base is due to ‘Right-of-use assets’ closing the period at $139.07 million (2021: nil) and ‘Inventories’ which amounted to $117.20 million (2021: $29.02 million). The movement was offset by ‘Property, plant and equipment’ which contracted by 64% to $45.18 million (2021: $126.75 million).
Shareholders’ Equity amounted to $220.51 million (2021: $206.84 million). As a result, as at September 30, 2022 the company book value per share increased to $0.20 from $0.18 in the prior year.
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