KREMI reports 86% decline in six months net profit

October 18, 2022

Caribbean Cream Ltd. (KREMI) for six months ended August 31, 2022 reported a 22% increase in revenue totalling $1.26 billion compared to $1.03 billion in the corresponding period last year. Revenue for the second quarter rose 33% to close at $645.40 million compared to $486.24 million for the comparable quarter of 2021.

Costs of sales amounted to $903.63 million (2021: $673.76 million), this represents an increase of 34% year over year. KREMI noted that during the quarter, “Large price increases in key raw materials were the main driver, in addition to an increased foreign exchange rate, and higher utility costs.” Consequently, gross profit fell by 2% to $353.52 million compared to $360.93 million for the period ended August 31, 2021. The Company booked gross profit of $189.13 million for the second quarter versus $153.41 million reported for the similar quarter of 2021.

Administrative expenses rose by 15% to close at $285.64 million (2021: $249.01 million), while selling and distribution costs increased by 4% from $30.48 million in 2021 to $31.85 million in the period under review. As a result, operating profit for the six months period amounted to $36.90 million, a 55% decrease relative to $81.44 million reported twelve months earlier. Management noted that, “The increase was due to higher cost of utilities, security, cleaning and sanitization, and loan financing. While our electricity consumption has remained flat, rate increases are driving up our cost, and almost weekly fuel price increases are driving up the cost of transportation and a wide range of our materials and services.”

Finance cost rose by 133% year over year, amounting to $27.41 million relative to $11.74 million recorded for the first six months of 2021. Interest income for the period declined to end at $231,248 relative to the $502,079 for the corresponding six months in the prior year.

Taxation year to date amounted to $1.22 million, 86% less compared to the $8.77 million charged for the corresponding period last year. As such, KREMI reported net profit of $8.51 million, compared to the $61.42 million for the prior year’s corresponding period. Profit for the quarter amounted to $7.18 million (2021: $7.27 million), down 1% year over year.

Consequently, Earnings per Share for the six-month period amounted to $0.02 (2021: $0.16), while the EPS for the quarter totalled $0.02 (2021: $0.02). The trailing twelve months loss per share amounted to $0.16. The number of shares used in these calculations were 378,568,115 units. Notably, KREMI’s stock price closed the trading period on October 14, 2022 at a price of $4.06.


Balance Sheet Highlights:

The company’s assets totalled $1.78 billion (2021: $1.36 billion), $419.09 million more than its value as at August 2021. The increase in assets was largely due to an increase of $467.79 million in ‘Property, Plant and equipment’ to a total of $1.33 billion (2021: $857.69 million).

Shareholders’ equity was $807.01 million (2021: $869.08 million), representing a book value per share of $2.13 (2021: $2.30).


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