Consolidated Bakeries (Jamaica) Limited (PURITY)

For the nine months ended September 30, 2017

Consolidated Bakeries (Jamaica) Limited (PURITY) for the nine months ended September 30, 2017 recorded a 6% decline in revenue to $643.07 million from $680.64 million reported for the corresponding period in 2016. For the third quarter the company recorded revenue of $195.61 million (2016: $209.12 million), representing a 6% contraction year over year.

Cost of sales for the period declined 1% to close at $430.79 million (2016: $434.66 million), leading to a gross profit of $212.28 million (2016: $245.98 million). Within the quarter PURITY recorded cost of sales of $134.58 million, down 1% relative to $135.59 million booked at the end of the third quarter for 2016.  As such, third quarter gross profits totaled $61.03 million, down 17% year over year (2016: $73.53 million).

Other income decreased 9% to $3.38 million relative to $3.72 million booked for the comparable period in 2016.

The company reported total expenses of $235.14million, an increase of 9% when compared to the $214.80 million reported in 2016. Administrative expenses amounted $132.19 million, up 9% relative to the $121.68 million reported in 2016, while, selling expense was up 11% to close at $102.95 million (2016: $93.12 million). This resulted in an operating loss of $19.49 million for the nine-month period, compared to an operating profit of $34.90 million documented for the comparable period in 2016.

Finance costs declined 31% to close at $3.37 million versus $4.90 million in 2016. The company made no payment in taxes for the year to date due to the tax holiday still present.  Consequently, PURITY recorded net loss of $22.86 million relative to a net profit of $30 million the prior year. A net loss of $14.20 million was booked for the third quarter, in contrast to a profit of $2.86 million for the corresponding quarter in 2016.

As a result, loss per share (LSP) for the nine months amounted to $0.10 compared to an earnings per share (EPS) of $0.13 reported in 2016. For the quarter the loss per share totaled $0.064 relative to an EPS of $0.013 in 2016. The twelve month trailing LPS is $0.19 and the number of shares used in our calculations is 222,709,171 units.

Total Comprehensive loss of $20.74 million was recorded for the period relative to comprehensive income of $37.74 million recorded the prior year.

Balance Sheet Highlights:

The Company, as at September 30, 2017, recorded Total Assets of $715.39 million, an increase of 4% year over year. The increase was attributed mainly to a 99% growth in ‘Cash and Cash Equivalents’ which closed at $48.70 million (2016: $24.52 million).

Total Stockholders’ Equity as at September 30, 2017 was $526.67 million (2016: $571.22 million), representing a decrease of 8%. This resulted in a book value of $2.36 (2016: $2.56).