SALF reports 219% increase in year end net profit

November 27, 2018

Salada Foods Jamaica Limited (SALF), for the year ended September  30, 2018: recorded a 19% increase in turnover to close at $1.04 billion (2017: $871.73 million). For the fourth quarter revenue amounted to $292.79 million (2017: $258.94 million), a 13% rise.

SALF also noted that, “domestic sales continue to perform well, growing by 16.7% above prior year as we deepen our penetration in existing channels and access new ones. Sales to the trade through our distribution partner Lasco was $655M, 13% above prior year. Export sales also did well, as both the Canadian and Barbadian market performed, growing year on year by 440% and 220% respectively. Our contract packaging sales grew 35% above last year.”

Cost of sales for the year increased by 8% to close the period at $641.54 million relative to $595.48 million in 2017. As such, gross profit amounted to $399.96 million, a 45% increase year over year from the $276.25 million booked in the prior year. Gross profit for the quarter posted a 75% growth to close at $107.16 million relative to $61.18 million booked for the comparable quarter in 2017.

Administrative expenses fell by 43% to $84.98 million (2017: $148.86 million). Also, selling and promotional expense increased by 37% from $32.76 million in 2017 to $44.90 million. Management stated that, “The launch of the MB876 and other marketing activities pushed selling and promotional expenses up 37.3% or $12.14M above prior year”. SALF also incurred other operating expenses in 2017 amounting to $14.59 million relative to nil in 2018.

Consequently, this resulted in an operating profit of $270.07 million, up 237% compared with the $80.05 million reported for the prior year. Operating profit for the fourth quarter surged to $105.18 million (2017: $4.27 million).

The company reported net finance income of $20.64 million for the period; this compares to the net finance income of $7.46 million for the same period in 2017.

Profit before taxation increased by 232% to $290.71 million versus $87.51 million booked for the previous year.

Net profit climbed significantly by 219%, from $68.69 million in 2017 to $219.18 million following taxation of $71.53 million (2017: $18.82 million). Net profit for the quarter rose to $82.32 million in 2018 relative to $5.40 million in 2017.

Net profit attributable to shareholders amounted to $219.68 million relative to $69.63 million booked twelve months earlier. Management noted, “profits we buoyed by strong sales performance, with the Group achieving sales over one billion ($1.041B), for the first time in the Company’s history. SALF noted, “the optimization of factory operations resulted in improved margins, which also contributed.”

Total comprehensive income for the year amounted to $240.69 million versus $88.60 million in 2017.

Earnings per stock for the year amounted to $2.11 (2017: $0.67). The EPS for the quarter was $0.79 (2017: $0.04). SALF stock price closed the trading period on November 27, 2018 at a price of $21.50.

In May we launched our Mountain Bliss 876 (MB876) brand in keeping with our strategy to engage younger consumers. MB876 featured two SKU’s the Gold, which is a freeze-dried coffee and Classic, an agglomerated coffee. Within 5 months of launch we have gained retail distribution of 70%.

Balance Sheet at a Glance:

As at September 30, 2018, total assets rose by 16% or $149.22 million to $1.11 billion. This increase was primarily driven by investments which amounted to $303.20 million (2017: $176.30 million). Accounts receivables grew 23% for the year to $236.95 million compared to the previous  year’s total of $192.14 million.

Shareholders equity as at September 30,2018, amounted to $938.86 million (2017: $802.05 million) resulting in a book value per share of $9.04 (2017: $7.72).


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