August 12, 2021
Salada Foods Jamaica Limited (SALF), for the nine months ended June 30, 2021, recorded a 9% increase in turnover to close at $890.03 million (2020: $819.55 million). As for the third quarter, revenue amounted to $310.74 million (2020: $256.77 million), a 21% growth year over year. SALF noted, “Export accounted for 22% of the total revenue with sales to both the tri-state area and Florida, as well as Canada continues to record double digit year on year growth. Domestic sales were up 9% when compared to the corresponding period last year.”
The cost of sales for the period under review increased by 5% to close at $619.36 million relative to $588.23 million in 2020. As such, gross profit amounted to $270.68 million, a 17% climb year over year from the $231.32 million booked for the 2020 corresponding period. Gross profit for the third quarter rose 29% to close at $102.48 million (2020: $79.17 million).
Other operating income for the nine months amounted to $949,000 relative to $679,000 in 2020.
Administrative expenses fell by 1% to $96.70 million for the nine months ended June 30, 2021 (2020: 97.51 million). Also, selling and promotional expenses went down 23% from $46.74 million in 2020 to $36.18 million for the nine months ended June 30, 2021.
Consequently, this resulted in an operating profit of $138.75 million, a 58% growth when compared with the $87.76 million reported for the corresponding nine months in the prior year. Operating profit for the quarter recorded a 65% increase to $58.55 million (2020: $35.49 million).
The Company reported net finance income of $15.13 million for the period, this compares to net finance cost of $39.74 million for the same period in 2020. While, for the quarter, net finance income closed at $8.63 million versus net finance cost of $3.63 million reported for the same quarter in 2020.
Profit before taxation rose by 220% to $153.88 million versus $48.02 million booked in 2020. For the quarter, profit before taxation rose 111% to close at $67.18 million (2020: $31.87 million).
Taxation expense for the six months was $38.47 million (2020: $12.50 million).
Consequently, net profit year to date rose 208%, from $35.52 million in 2020 to $115.41 million in 2021. As for the quarter, net profit increased 114% from $23.82 million booked in 2020 to $50.93 million in 2021.
Net profit attributable to shareholders for the period end June 30, 2021, amounted to $115.41 million relative to $35.79 million recorded twelve months earlier. Profit attributable to shareholders for the quarter amounted to $50.93 million (2020: $23.92 million).
Earnings per share for the nine months amounted to $0.11 (2020: $0.03). The EPS for the third quarter was $0.05 (2020: $0.02). The trailing twelve-month EPS amounted to $0.18. The number of shares used in our calculations are 103,883,290 units. SALF stock price closed the trading period on August 12, 2021 at a price of $7.79 with a corresponding P/E of 42.57 times.
SALF highlighted, “this positive development resulted from being able to source and use competitively priced coffee green beans used in the manufacture of our flag ship products, the mix of products sold during the period, and expenses reduction.”
Balance Sheet at a Glance:
As at June 30, 2021, total assets increased by 11% or $123.24 million to $1.22 billion (2020: $1.10 billion). The primary growth in the asset base is due to ‘Cash and Cash Equivalents’ and ‘Investments’ which closed at $166.96 million (2020: $99.80 million) and $151.36 million (2020: $100.54 million). ‘Inventories’ also contributed to the increase by closing at $486.76 million (2020: $469.05 million).
Shareholders equity as at June 30, 2021 amounted to $964.49 million (2020: $926.01 million) resulting in a book value per share of $0.93 (2020: $0.93).
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 affect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein