December 29, 2021

Salada Foods Jamaica Limited (SALF), for the year ended September 30, 2021 recorded an 11% increase in turnover to close at $1.19 billion (2020: $1.07 billion). The movement was brought about by, among other things, “the successful introduction of new, non-coffee products, namely the Jamaica Mountain Peak Ginger Turmeric Tea and continued strong export sales. For the fourth quarter, revenue amounted to $299.71 million (2020: $248.38 million), a 21% rise year over year.

Cost of sales for the year increased by 7% to close the period at $828.53 million relative to $772.64 million in 2020. As such, gross profit amounted to $361.21 million, a 22% growth year over year from the $295.30 million booked in the prior year. Gross profit for the quarter posted a 42% increase to close at $90.53 million relative to $63.98 million booked for the comparable quarter in 2020.

Administrative expenses fell by 7% to $125.72 million (2020: $135.67 million). Also, selling and promotional expenses increased by 18% from $44.34 million in 2020 to $52.43 million  for the period under review. Management noted that the increase in expenses was, “in support of new products and shifting market trends from bottles to sachets. Consumers reduced their media consumption patterns while adhering to various COVID-19 restrictions forcing the team to develop innovative tactics to gain or maintain their attention.”

Consequently, this resulted in an operating profit before other income, net finance cost and taxation of $182.13 million, up 44% compared with the $126.69 million reported for the prior year.

The company reported other income of $1.19 million (2020: $12.81 million) and net finance income of $15.71 million for the period compared to the net finance income of $8.71 million for 2020.

Profit before taxation rose by 47% to $197 million versus $134.19 million booked for the previous year.

Net profit climbed by 42%, from $110.49 million in 2020 to $156.83 million for the period under review following taxation of $40.17 million (2020: $23.71 million). Net profit for the quarter fell to $41.42 million in 2021 relative to $74.97 million in 2020. Management noted, “The Company suffered the deleterious effects of complying with the Jamaica Agricultural Commodities Authority (JACRA) regulations for a 30% locally grown coffee quota, ongoing supply chain disruptions and increasing freight costs. However, the negative impact was mitigated by relying on built up inventory of raw materials and lower cost beans.”

Net profit attributable to shareholders amounted to $156.83 million relative to $110.49 million booked twelve months earlier. Total comprehensive income for the year amounted to $155.45 million versus $65.85 million in 2020.

Earnings per stock for the year amounted to $0.15 (2020: $0.11). The EPS for the quarter was $0.04 (2020: $0.07). SALF stock price closed the trading period on December 28, 2021 at a price of $6.38 with a corresponding P/E of 42.26 times.

Balance Sheet at a Glance:

As at September 30, 2021, total assets rose by 13% to end at $1.27 billion (2020: $1.12 billion). This increase was primarily driven by inventories which amounted to $528.87 million (2020: $405.27 million). This was mainly tempered by a decrease in ‘Cash and cash equivalent’ by 32% to $116.45 million compared to the previous year’s total of $170.86 million.

Shareholders equity as at September 30, 2021, amounted to $1 billion (2020: $957.12 million) resulting in a book value per share of $0.97 (2020: $0.92).

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