Salada Foods Jamaica Limited (SALF) for the six months ended March 31, 2023:

Revenue increased 8% to $688.26 million (2022: $635.27 million). For the quarter, revenue increased 14% to $394.22 million (2022: $345.92 million).

Cost of sales increased 8% to $472.69 million (2022: $436.14 million). Consequently, gross profit increased 8% to $215.57 million (2022: $199.13 million). For the quarter, gross profit increased 14% to $122.09 million (2022: $107.01 million).

Other operating income increased 133% to $1.10 million (2022: $472,000) while total operating expenses increased 19% to $75.91 million (2022: $70.67 million) with selling and promotional expenses contributing the most with a 44% increase to $44.38 million (2022: $30.79 million). This resulted as the Company aggressively supported expansion into new markets, pursued innovative strategies and product development and diversification.

Operating profit declined 2% to $96.39 million (2022: $98.14 million). For the quarter, operating profit increased 10% to $60.48 million (2022: $54.98 million).

Net finance income declined 70% to $3.46 million (2022: $11.51 million).

Profit before taxation declined 9% to $99.84 million (2022: $109.66 million).

Taxation charges declined 9% to $24.96 million (2022: $27.41 million). As a result, net profit declined 9% to $74.88 million (2022: $82.24 million). For the quarter, net profit increased 18% to $47.51 million (2022: $40.32 million).

Net profit attributable to shareholders declined 9% to $74.88 million (2022: $82.24 million).

Earnings per share (EPS) amounted to $0.07 (2022: $0.08). For the quarter, EPS amounted to $0.05 (2022: $0.04). The trailing twelve-month EPS amounted to $0.16. The number of shares used in the calculations is 1,038,832,900. SALF’s stock price closed the trading period on May 11, 2023 at $3.65 with a corresponding P/E ratio of 22.56x.

Management noted that the inconsistent supply of local green coffee beans, a crucial raw ingredient, continues to hinder industrial productivity and operational effectiveness at the Company.

Balance Sheet Highlights:

Total assets as at March 31, 2023 declined 7% to $1.32 billion (2022: $1.23 billion). This movement was primarily due to a 145% increase in ‘Investments’ to $244.72 million (2022: $99.79 million).

Shareholders’ equity as at March 31, 2023 increased 3% to $1.06 billion (2022: $1.03 billion) resulting in a book value per share of $1.02 (2022: $0.99).

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.