December 19, 2022

Salada Foods Jamaica Limited (SALF)

For the year ended September 30, 2022: –

Salada Foods Jamaica Limited (SALF), for the year ended September 30, 2022 recorded a 12% increase in turnover to close at $1.34 billion (2021: $1.19 billion). As for the fourth quarter, revenue amounted to $372.82 million (2021: $299.71 million), a 24% growth year over year. SALF noted, “Significant marketing effort was dedicated to improving distribution and visibility in strategic trade channels and improving operational efficiency. During the year we also introduced our Flavoured Coffee line, including Coconut Cappuccino, Caramel and Cinnameg. These initiatives helped bolster the results achieved.”

Cost of sales for the period under review increased by 12% to close at $924.44 million relative to $828.53 million in 2021. As such, gross profit amounted to $412 million, a 14% climb year over year from the $361.21 million booked for 2021 corresponding period. Gross profit for the third quarter grew by 31% to close at $118.17 million (2021: $90.53 million).

Other income for the year ended amounted to $746,000 (2021:$1.19 million).

Administrative expenses rose by 6% to $133 million for the year ended September 30, 2022 (2021: $125.72 million). Also, selling and promotional expenses decreased by 1% from $52.43 million in 2021 to $51.86 million for the year ended September 30, 2022.

Consequently, this resulted in an operating profit of $223.96 million, a 23% growth when compared with the $182.13 million reported for the corresponding year ended in the prior year. Operating profit for the quarter recorded a 91% increase to $82.88 million (2021: $43.38 million).

The Company reported net finance income of $6.75 million for the period, this compares to net finance income of $14.87 million for the same period in 2021. While, for the quarter, net finance cost closed at $449,000 versus net finance cost of $262,000 reported for the same quarter in 2021.

Profit before taxation increased by 17% to $230.71 million versus $197 million booked in 2021. For the quarter, profit before taxation increased by 91% to close at $82.43 million (2021: $43.12 million).

Taxation expense for the year amounted to $55.3 million (2021: $40.17 million).

Net profit grew by 12%, from $156.83 million in 2021 to $175.42 million in 2022.  As for the quarter, net profit increased by 55% from $41.42 million booked in 2021 to $64.21 million in 2022.

Net profit attributable to shareholders for the period end September 30, 2022, amounted to $175.42 million relative to $156.83 million recorded twelve months earlier. Profit attributable to shareholders for the quarter amounted to $64.21 million (2021: $41.42 million).

Earnings per share for the year ended amounted to $0.17 (2021: $0.15). The EPS for the fourth quarter was $0.06 (2021: $0.04). The trailing twelve-month EPS amounted to $0.17. The number of shares used in our calculations are 1,038,832,900 units. SALF stock price closed the trading period on December 16, 2022 at a price of $4.25 with a corresponding P/E of 25.17 times.

SALF highlighted, “The results show that Salada continues to manage expectations and challenges from the lingering economic and social effects of the COVID-19 pandemic, ongoing geo-political conflicts, raw material shortages and a challenging commercial environment remain concerns. Moreover, the Company’s relatively strong and debt free balance sheet, will enable the Company to remain agile and nimble in the current inflationary environment.”

Balance Sheet at a Glance:

As at September 30, 2022, total assets increased by 6.6% or $84.17 million to $1.35 billion (2021: $1.27 billion). The growth in the asset base was primarily due to ‘Investments’ which closed at $242.59 million (2021: $158.8 million).

Shareholders equity as at September 30, 2022 amounted to $1.05 billion (2021: $1 billion) resulting in a book value per share of $1.01 (2021: $0.97).

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