SALF books 31% increase in nine months net profit

Salada Foods Jamaica Limited (SALF) for the nine months ended June 30, 2017, recorded an 8% increase in turnover for the quarter to $208.42 million (2016: $192.16 million). Salada Foods’ turnover increased by 13% to $612.80 million for the nine months ended June 2017 compared to $540.28 million booked in the previous year. The company noted that, “top line growth was attributed mainly to improved sales through our local distributor, LASCO, which grew by 35%. Export sales continue to lag due to challenges in the New York Tri-State region of the United States but we have implemented a marketing initiative to turn things around. The Miami Market is a success story for Salada and is now poised for expansion beyond our Diaspora target market.”

Cost of sale for the period increased by 14% to close at $397.72 million relative to $348.55 million for the same period last year. As such, gross profit for the nine months and third quarter improved 12% and 1% to $215.08 million and $70.62 million respectively.

Other operating loss for the period was $1.80 million, compared to operating loss of $178,000 for the same period last year. Administrative expenses declined by 1% to $94.04 million (2016: $94.76 million). Selling and promotional expense rose 4% from $41.62 million in 2016 to $43.46 million.

Consequently, this resulted in an operating profit of $75.78 million, this compares with the profit of $55.17 million that was reported for the comparative period the year prior. The company highlighted this was, “driven by the increase in domestic sales, improvement in margins, treasury management, and tighter expense control.” Net finance income for the period increased by 35% to $10.73 million compared to $7.93 million for the same period a year ago.

Net profit before taxation stood at $86.51 million this compares with the pre-tax profit of $63.10 million booked for the period ended June 30, 2016.

Net Profit for the quarter increased by 1% closing the quarter at $18.38 million relative to $18.14 million reported the corresponding quarter of 2016. Net Profit for the nine months ended June 30, 2017 the period was $63.29million versus a net profit of $47.18 million booked for the comparable period in 2016.

Net profit attributable to stockholders totalled $65.49 million for the nine months ended June 30, 2017 compared to $50.03 million recorded for June 2016. Profit attributable to shareholders for the third quarter decreased 1% to $19.04 million, this compares to $19.18 million reported in 2016. SALF noted, “Mountain Peak Food Processors Limited, which became a 100% subsidiary in the fiscal third quarter, with Salada having bought the shares of the minority shareholders, continues to operate as the distribution arm of the Group. Our Pimora subsidiary remains challenged as it seeks to gain market acceptance of its innovative pimento smoker products.” The company further indicated, “growth in the north east United States remains paramount on our agenda and, engaging a young demographic, our local marketing thrust.”

Earnings per stock unit for the nine months amounted to $0.63 (2016: $0.48), while the EPS for the quarter amounted to $0.18 (2016: $0.18). The twelve month trailing EPS is $0.86. The number of shares used in our calculations is 103,883,290.


Balance Sheet at a Glance:

As at June 30, 2017, total assets rose by 7% or $64.64 million to $958.08 million. This increase was primarily driven cash and cash equivalents which amounted to $143.53 million during the period versus $61.38 million for the same period last year. The company also recorded a 113% increase in investments which moved from $54.64 million as at June 30, 2016 to $116.48 million as at June 30, 2017. SALF posted a reduction in inventory moving from $273.08 in 2016 to $302.14 million during the current period.

Shareholders’ equity totalled $787.32 million (2016: $749.55 million), resulting in a book value per share of $7.58 (2016: $7.22).





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