August 12, 2022
Unaudited Financials for the six months ended June 30, 2022:
JFP Limited (JFP), for the six months ended June 30, 2022 recorded a 83% or $96.62 million increase in revenue from $117.01 million in 2021 to $213.63 million in 2022. Cost of sales however reduced by 13% or $10.15 million to $68.25 million (2021: $78.40 million). Management noted that, “JFP realized a decrease in cost of sales of 13% from 78.4M to 68.2M reflecting the increased efficiency of operations.”
The 83% growth in revenue led to a significant rise in JFP’s six months gross profit, which rose to $145.39 million from $38.61 million in 2021.
Other income closed the six-month period at $3.86 million, 76% down from $15.91 million booked twelve months earlier.
However, total operating expenses grew by 71% to $105.44 million (2021: $61.76 million). Of total expenses, administrative and selling & distribution expenses grew by 57% and 471% respectively, to $93.67 million (2021: $59.70 million) and $11.77 million (2021: $2.06 million) respectively. JFP mentioned that the increase in administrative expenses was due to, “a salary increase as well as the introduction of a quarterly incentive for administrative staff. The staff complement grew which resulted in an increase in other staff related costs such as health insurance. There was also an increase in the sales commission due to improved sales performance.” Further commenting on the increase in selling and distribution expenses, management explained that “This was due to an increase in the advertising and promotional expenses mostly due to increased participation in international trade shows. This quarter saw us participating in the KFC show in Chicago which contributed substantially to the increased advertising expenses for the period.”
This resulted in an operating profit for the period of $43.82 million, relative to an operating loss of $7.24 million reported in 2021.
Net finance Costs reported were $8.22 million (2021: $3.68 million), this increase was as a result of the “of the interest incurred from the leased factory building” Of net financial cost, financial cost amounted to $8.27 million (2021: $3.73 million) and financial income $46,133 (2021: $47,088).
JFP’s profit before tax grew to $35.60 million (2021: Loss of $10.92 million), there was no taxation for the period under review (2021: $1.30 million). As a result, six months net profit closed $35.60 million (2021: Loss of $12.22 million). For the quarter, net profit closed at $690,371 versus net loss of $20.56 million in the prior comparable period. Management noted, “There was an improvement in the year-to-date bottom line which saw JFP moving from a loss of 12M to a profit of 35.6M. This was driven primarily by an increase in sales and by extension, gross profit.”
Based on current earnings, JFP reported an earnings per share (EPS) of $0.03 compared to a loss-per-share (LPS) of $0.01 reported in 2021. For the quarter, EPS totalled $0.006 (2021: LPS of $0.02). On twelve-months trailing basis JFP output an EPS of $0.05. The number of shares used in our calculations is 1,120,000,000 units. JFP stock last traded on August 12, 2022 at $1.58 with a corresponding P/E of 31.52 times.
Balance Sheet at a glance:
As at June 30, 2022, JFP had Total Assets of $562.75 million (2021: $382.58 million), reflecting a 47% year over year increase. The primary increase in the asset base is due to ‘Right-of-use assets’ closing the period at $142.87 million (2021: nil) and ‘Investments’ which amounted to $122.88 million (2021: $40.46 million). The movement was offset by ‘Property, plant and equipment’ which contracted by 65% to $45.52 million (2021: $129.26 million).
Shareholders’ Equity amounted to $212.97 million (2021: $190.75 million). As a result, as at June 30, 2022 the company book value per share increased to $0.19 from 0.17 in the prior year.
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