KREMI reports 35% increase in nine months net profits

Date: January 14, 2018

Caribbean Cream Limited (KREMI) for nine months ended November 30, 2018 reported a 16% increase in revenue during the period totalling $1.15 billion compared to $992.24 million in the corresponding period last year. Revenue for the third quarter rose 9% to close at $348.24 million compared to $318.98 million for the comparable quarter of 2017. Management indicated, “The quarter’s increase is as a result of improved product availability and a price increase.”

Costs of sales amounted to $757.42 million (2017: $686.80 million), an increase of 10%, while for the quarter this moved up by 4% to $241.90 million (2017: $233.66 million) . According to KREMI, “costs for the third quarter were mainly due to higher production costs.” Nevertheless, gross profit jumped up by 28% or $84.88 million to $390.32 million compared to $305.44 million for the period ended November 30, 2017. The company booked gross profit of $106.33 million for the third quarter versus $85.32 million reported for the similar quarter of 2017.

Administrative Expenses climbed 26% to close at $242.71 million (2017: $193.34 million), while selling and distribution costs increase 23% from $33.68 million to $41.48 million. The company highlighted the increased costs for the quarter resulted mainly from (1) rental of property to facilitate the expansion of refrigeration facilities and additional storage and (2) upgrade of the depots. Consequently, operating profit for the nine months period amounted to $107.87 million, up 35% relative to $80.12 million book in 2017.

In addition, finance cost rose 13% year over year to amount to $13.85 million relative to $12.26 million recorded in the nine months ended November 30, 2017. The company reported a decline in interest income for the period from $3.29 million to $1.99 million for the nine months.

No taxes were charged for the period, as such net profit attributable to shareholders increased by 35% from $71.15 million in 2017 to $96.02 million. Profit for the quarter amounted to $1.74 million (2017: $652,605), up 166% year over year. Consequently, Earnings per Share (EPS) for the nine months amounted to $0.25 (2017: $0.19), while the EPS for the quarter totalled $0.005 (2017: $0.002). The trailing twelve months earnings per share amounted to $0.30. The numbers of shares used in these calculations were 378,568,115 units. KREMI’s stock price close the trading period on January 11, 2018 at a price of $5.91.

Balance Sheet Highlights:

The company’s assets totalled $979.87 million (2017: $781.86 million), $198.01 million more than its value as at November 30, 2017. The increase in assets was largely due to an increase of $172.22 million in ‘property, plant and equipment to a total of $658.95 million (2017: $486.73 million). ‘Inventory’ and ‘Cash and Cash Equivalents’ also increased as at November 30, 2018 to close as $116.39 million (2017: $96.09 million) and $149.79 million (2017: $144.88 million) respectively.

Shareholders’ equity amounted to $715.34 million (2017: $618.88 million), representing a book value per share of $1.89 (2016: $1.63).

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