October 17, 2023
Caribbean Cream Limited (KREMI)
Unaudited financials for the six months ended August 31, 2023:
Caribbean Cream Limited (KREMI) for the six months ended August 31, 2023 reported a 1% decline in Revenue totaling $1.25 billion compared to $1.26 billion in the corresponding period last year. Revenue for the second quarter recorded a slight increase to close at $646.26 million compared to $645.40 million for the comparable quarter of 2022. According to management, “Sales were hampered by production disruptions due to the ammonia shortage in the previous quarter.”
Cost of Sales amounted to $859.83 million (2022: $903.63 million), this represents a decrease of 5% year over year. Lower production levels and savings from lower electricity usage in the production process mainly accounted for the reduction in cost.
Consequently, gross profit increased by 10% to $390.42 million compared to $353.52 million for the six months ended August 31, 2022. The Company booked gross profit of $204.60 million for the second quarter versus $189.13 million reported for the similar quarter of 2022.
Administrative expenses increased by 7% to close at $305.57 million (2022: $285.64 million), while Selling and distribution costs rose 3% from $31.85 million in 2022 to $32.94 million in the period under review. As a result, total expenses for the six months ended August 31, 2023 amounted to $338.51 million, a 7% increase relative to $317.49 million reported in 2022. The increases were mainly due to higher costs related to staff, security, and bank borrowings associated with the funding of company’s capital expenditure plan.
Operating Profit for the six months ended August 31, 2023, amounted to $54.48 million, a 48% increase relative to $36.90 million reported in 2022. Operating Profit for the second quarter amounted to $29.11 million (2022: $23.49 million).
Net Finance cost totalled $42.02 million a 55% increase from the corresponding period last year. (2022: $27.18 million).
Profit before taxation for the six months ended August 31, 2023, amounted to $12.47 million, a 28% increase relative to $9.72 million reported in 2022. Profit before taxation for the second quarter amounted to $4.81 million (2022: $8.21 million).
Taxation for the six months ended August 31, 2023 grew 78% to reach $2.16 million (2022: $1.22 million). As such, Net Profit for the six months amounted to $10.31 million, a 21% increase from the $8.51 million reported in 2022. For the second quarter, Net Profit was $3.61 million (2022: $7.18 million).
Consequently, Earnings Per Share for the six months amounted to $0.03 (2022: EPS: $0.02), while Earnings Per Share for the quarter totaled $0.01 (2022: EPS: $0.02). The twelve-month trailing EPS was $0.08 and the number of shares used in these calculations was 378,568,115.
Notably, Kremi’s stock price closed the trading period on October 13, 2023 at a price of $4.34 with a corresponding P/E ratio of 56.83x.
Balance Sheet Highlights
The company’s assets totalled $2.30 billion (2022: $1.78 billion). The growth in total assets was primarily due to ‘Property, Plant & Equipment’ increasing 29% to close at $1.71 billion . (2022: $1.33 billion). Management noted, “The investments over the course of the year being made within our production facility will garner increase production at lower costs contributing to meeting market demand and customer satisfaction.”
Shareholder’s equity was $835.92 million (2022: $807.01 million), representing a book value per share of $2.21 (2022: $2.13).
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