SALF reports 17% decline in nine months net profit

Date: August 09, 2019

Salada Foods, recorded a 3% increase in turnover for the nine months to close at $769.64 million (2018: $748.70 million). For the third quarter revenue amounted to $275.14 million (2018: $266.43 million), a 3% rise. SALF stated that this was due to, “improvements in domestic sales coupled with stronger sales in export markets.”

Cost of sales for the nine months increased by 10% to close the period at $502.98 million relative to $455.91 million in 2018. As such, gross profit amounted to $266.66 million, a 9% decrease year over year from the $292.80 million booked in the prior year. Gross profit for the third quarter fell 3% to close at $98.99 million relative to $101.57 million booked for the comparable quarter in 2018.

Other operating income for the first nine months amounted to $4.92 million relative to income of $2.77 million booked in 2018.

Administrative expenses rose by 20% to $107.31 million (2018: $89.56 million). Management noted that, “this was attributable to salary, staff welfare and training expenses.” Also, selling and promotional expense went up by 5% from $41.11 million in 2018 to $43.29 million in 2019.

Consequently, this resulted in an operating profit of $120.98 million, down 27% compared with the $164.90 million reported for the corresponding nine months period for prior year. Operating profit for the third quarter closed at $42.65 million (2018: $57.52 million).

The company reported net finance income of $24.36 million for the period; this compares to the net finance income of $15.96 million for the same period in 2018.

Profit before taxation decreased by 20% to $145.34 million versus $180.85 million booked for the previous year’s corresponding period. While, for the quarter, pre-tax profits closed at $77.23 million (2018: $73.53 million).

For the nine months ended June 30, 2019, net profit fell by 17%, from $136.85 million in 2018 to $114.15 million following taxation of $31.19 million (2018: $44 million). Net profit for the quarter rose by 7% to $60.38 million in 2019 relative to $56.58 million in 2018.

Net profit attributable to shareholders for the nine months amounted to $114.39 million relative to $137.22 million twelve months earlier. Profit attributable to shareholders for the quarter amounted to $60.41 million compared to $56.60 million for the corresponding quarter of 2018.

SALF noted that, “profitability continues to be impacted by the cess on green beans with $56M paid to JACRA year to date.” In addition, “the outlook for the remaining three months to year end remains favourable with strengthening of our marketing efforts in both domestic and overseas markets,” the Company highlighted.

Earnings per stock unit for the nine months amounted to $1.10 (2018: $1.32). the EPS for the third quarter was $0.58 (2018: $0.54). The trailing twelve-month EPS is $1.89. SALF stock price closed the trading period on August 08, 2019 at a price of $34.00.

Balance Sheet at a Glance:

As at June 30,2019 ‘Total assets’ rose by 6% or $70.83 million to $1.18 billion (2018: $1.11 billion). This increase was primarily driven by ‘Accounts receivables’ and ‘Inventories’ which amounted to $302.73 million (2018: $220.74 million) and $442.72 million (2018: $274.53 million) respectively.

Shareholders equity as at June 30,2019 amounted to $949.34 million (2018: $835.41 million) resulting in a book value per share of $9.14 (2018: $8.04).

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