SALF reports 49% increase in first quarter net profits attributable to shareholders

Date: February 8, 2018

Salada Foods Jamaica Limited (SALF), for the quarter ended December 31, 2017, recorded a 17% increase in turnover for the quarter to $227.76 million (2017: $195.27 million). The company stated that, “Export sales grew by 100% and is the key driver of revenue growth. Improvements in the distribution of our brands in South East United was the reason for this performance.

Cost of sales for the year increased by 8% to close the quarter at $143.29 million relative to $132.49 million in 2017. As such, gross profit for the quarter amounted $84.47 million, a 35% increase year over year from the $62.79 million booked in 2016.

Other operating income for the first three months amounted to $1.43 million relative to $849,000 booked in 2016.

Administrative expenses rose by 10% to $32.39 million (2017: $29.34 million). Selling and promotional expense fell 12% from $13.57 million in 2016 to $11.91 million. SALF noted that the increase in expenses was “attributable to administration costs for professional fees.”

Consequently, this resulted in an operating profit of $41.60 million up by 101%, this compares with the $20.73 million reported for the corresponding quarter for prior year. SALF disclosed, “Increased sales and lower selling and distribution expenses were the contributors.”

The company reported net finance cost of $5.73 million for the quarter; this compares to the net finance income of $3.24 million for the same period in 2016.

Net profit before taxation increased by 50% to $35.86 million in 2018. This compares with the pre-tax profit of $23.97 million booked for the previous quarter. Net profit for the quarter rose by 55% to $26.77 million in 2018 relative to $17.29  million in 2016.

Earnings per stock unit for the quarter amounted to $0.26 (2016: $0.17). The trailing EPS is $0.76.

The company noted that its “contract manufacturing business line continues to record growth, increasing by 69.4% against the corresponding period,” and that it will continue to “pursue the sale of Salada’s interest in our Pimora Company subsidiary.”

Balance Sheet at a Glance:

As at December 2017, total assets rose by 2% or $17.72 million to $971.6 million. This increase was primarily driven by accounts receivables and investments which amounted to $238.77 million (2016: $118.16 million) and $200.52 million (2016: $74.53 million) respectively. Accounts receivables grew 102% for the first quarter when compared to the previous corresponding, while investments recorded a 169% growth over the same period.

Shareholders equity as at December 31, 2017, amounted to $777.13 million (2016: $748.62 million) resulting in a book value per share of $7.48 (2016: $7.21).


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