Date: February 12, 2019
Salada Foods Jamaica Limited (SALF) for the quarter ended December 31, 2018, recorded a 24% decline in turnover for the quarter to $172.34 million (2017: $227.76 million). The company stated that, “The decline arose in October 2018 from an accident in the boiler room wherein both boilers were damaged and had to be t taken offline. The repairs took longer than expected and the main boiler only came back online at the end of November. While it was down there was no production of coffee, however, there was sufficient finished goods inventory at Lasco and our overseas distributors to satisfy market needs. Full production resumed December 1, 2018 and we are now normalizing inventory levels with our distribution partners and expect by the end of the second quarter to get back on track with our financial results.”
Cost of sales for the quarter declined by 3% to close the quarter at $138.33 million relative to $143.29 million in 2017. As such, gross profit for the quarter amounted $34.01 million, a 60% drop year over year from the $84.47 million booked in 2017.
The company noted that “Our initiative to purchase 25,00 boxes of coffee cherries directly from farmers which commenced on November 15, 2018 is well underway. At the end of the quarter some 15,000 boxes were acquired. We expect to reach the 25,000 target by the end of March 2019 and spend $200 million inclusive of processing the cherries into green beans.”
No other operating income was booked for the first three months relative to $1.43 million booked in 2017.
Administrative expenses rose by 10% to $35.59 million (2017: $32.39 million). Selling and promotional expense rose 19% from $11.91 million in 2017 to $14.14 million. SALF noted that the increase in expenses was, “attributable to administration costs for professional fees.”
Consequently, this resulted in an operating loss of $15.73 million relative to an operating profit of $41.60 million reported for the corresponding quarter for prior year.
The company reported finance cost of $3.63 million for the quarter; this compares to the finance cost of $5.73 million for the same period in 2017.
Loss before taxation amounted to $19.36 million for the period relative to a profit before taxation of $35.86 million in 2017. Consequently, net loss for the quarter totalled $23.08 million relative to a net profit of $26.77 million booked in 2017.
Loss per share for the three months amounted to $0.22 relative to an earnings per share of $0.26 the prior year. The trailing twelve month EPS is $1.63. The number of shares used in our calculations are 103,883,290 units. SALF stock price closed the trading period on May 11, 201February 11, 2019 at a price of $38.08
Balance Sheet at a Glance:
As at December 2018, total assets rose by 6% or $62.49 million to $1.03 billion (2017: $971.60 million). This increase was primarily driven by ‘Inventories’ and ‘Investments’ which amounted to $255.36 million (2017: $128.45 million) and $263.14 million (2017: $196.74 million) respectively. Notably, ‘Cash and Cash Equivalents’ declined year over year from $128.45 million as at December 31, 2017 to $21.78 million for the corresponding period in 2018.
Shareholders equity as at December 31, 2018, amounted to $858.74 million (2017: $777.13 million) resulting in a book value per share of $8.27 (2017: $7.48).
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