August 12, 2022
Salada Foods Jamaica Limited (SALF), for the nine months ended June 30, 2022 recorded an 8% increase in turnover to close at $963.62 million (2021: $890.03 million). As for the third quarter, revenue amounted to $328.35 million (2021: $310.74 million), a 6% growth year over year. SALF noted, “This was buoyed by the successful product line extension launched during the period. The Flavored Coffee line, including Coconut Cappuccino, Caramel and Cinnameg, has been well received locally and distribution has commenced in key export markets. Export sales are up by 6.5% over the prior year strengthened by the rebound of key export markets including Canada.”
Cost of sales for the period under review increased by 8% to close at $669.79 million relative to $619.36 million in 2021. As such, gross profit amounted to $293.83 million, a 9% climb year over year from the $270.68 million booked for 2021 corresponding period. Gross profit for the third quarter contracted by 8% to close at $94.70 million (2021: $102.48 million).
Other operating income for the nine months amounted to $1.08 million relative to $949,000 in 2021.
Administrative expenses rose by 11% to $107.38 million for the nine months ended June 30, 2022 (2021: $96.70 million). Also, selling and promotional expenses rose by 28% from $36.18 million in 2021 to $46.45 million for the nine months ended June 30, 2022.
Consequently, this resulted in an operating profit of $141.08 million, a 2% growth when compared with the $138.75 million reported for the corresponding nine months in the prior year. Operating profit for the quarter recorded a 27% decline to $42.94 million (2021: $58.55 million).
The Company reported net finance income of $7.20 million for the period, this compares to net finance income of $15.13 million for the same period in 2021. While, for the quarter, net finance cost closed at $4.31 million versus net finance income of $8.63 million reported for the same quarter in 2021.
Profit before taxation fell by 4% to $148.28 million versus $153.88 million booked in 2021. For the quarter, profit before taxation contracted by 43% to close at $38.63 million (2021: $67.18 million).
Taxation expense for the six months was $37.07 million (2021: $38.47 million).
Net profit year to date fell by 4%, from $115.41 million in 2021 to $111.21 million in 2022. As for the quarter, net profit fell by 43% from $50.93 million booked in 2021 to $28.97 million in 2022.
Net profit attributable to shareholders for the period end June 30, 2022, amounted to $111.21 million relative to $115.41 million recorded twelve months earlier. Profit attributable to shareholders for the quarter amounted to $28.97 million (2021: $50.93 million).
Earnings per share for the nine months amounted to $0.11 (2021: $0.11). The EPS for the third quarter was $0.03 (2021: $0.05). The trailing twelve-month EPS amounted to $0.147. The number of shares used in our calculations are 103,883,290 units. SALF stock price closed the trading period on August 12, 2022 at a price of $5.29 with a corresponding P/E of 36 times.
SALF highlighted, “the significant disruption of domestic and foreign supply chain persists. This has been further exacerbated by geopolitical conflicts, which have resulted in supplier price increases. However, we have refrained from passing the full extent of these increases to the consumer. Salada prides itself on its ability to provide a cup for everyone.”
Balance Sheet at a Glance:
As at June 30, 2022, total assets increased by 4% or $43.93 million to $1.26 billion (2021: $1.22 billion). The growth in the asset base was primarily due to ‘Inventories’ which closed at $560.56 million (2021: $486.76 million). This was slightly offset by a 14% decline in ‘Investments’ which closed at $90.11 million (2021: $104.80 million).
Shareholders equity as at June 30, 2022 amounted to $1 billion (2021: $964.49 million) resulting in a book value per share of $0.96 (2021: $0.93).
Disclaimer:
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.