July 15, 2021
For the three months ended May 31, 2021, Caribbean Cream Limited (KREMI)’s turnover rose by 28% to $548.45 million (2020: $429.98 million). According to the Company, “We are deeply grateful for continued strong product demand while we work on our strategy to get closer to the consumer.”
Cost of sales also increased by 17% to $340.92 million (2020: $291.55 million), while, gross profit increased by 50% to $207.53 million compared to $138.42 million in 2020.
Administrative expenses rose by 37% to close at $125.61 million (2020: $91.96 million). In addition, selling and distribution costs rose by 21% from $12.59 million in 2020 to $15.22 million for the period under review. According to management, “The increase was because of higher transportation cost resulting from more deliveries, an internal reclassification of electricity, salary increases, staff-related expenditures due to COVID-19 safety measures and the full annualized cost for the new Ocho Rios depot.” Nevertheless, operating profit for the quarter amounted to $66.70 million, up 97% relative to the $33.87 million booked in the prior year.
Finance costs for the first quarter grew 49% to $5.03 million relative to $3.37 million reported in the prior year’s first quarter. Interest income decreased by 45% to $229,852 from $418,924 recorded in the prior comparable period.
Consequently, profit before taxation amounted to $61.90 million relative to $30.92 million in 2020 representing a 100% increase year-on-year for the period.
Taxes of $7.74 million were charged for the period relative to $3.87 million booked in the corresponding quarter in the prior year. As such, net profit attributable to shareholders increased by 100% from $27.06 million in 2020 to $54.16 million for the period under review.
As such, the earnings-per-share, for the first three months of 2021, amounted to $0.14 relative to $0.07 for the same quarter last year. The trailing twelve months earnings per share totalled $0.34. The number of shares used in our calculation is 378,568,115. KREMI’s last traded price as at July 15, 2021, was $5.72 with a corresponding P/E ratio of 16.95 times.
Balance Sheet Highlights:
The Company, as at May 31, 2021, recorded total assets of $1.42 billion, an increase of 23% when compared to $1.15 billion recorded last year. The increase in the asset base was due mainly to a $128.18 million increase in ‘Cash and Cash Equivalents’ which closed at $264.20 million (2020: $136.02 million). Additionally, there was a $102.36 million increase in ‘Property, Plant and equipment’ to close at $862.65 million (2020: $760.30 million).
Total stockholders’ equity as at May 31, 2021, closed at $888.09 million (2020: $771.29 million) resulting in a book value per share of $2.35 (2020: $2.04).
Disclaimer:
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.