Jamaican manufacturing company, Salada Foods Jamaica Limited ended its 2021 financial year with profits growing by 42 per cent.

For the fiscal year ended September 30, 2021 profits climbed from $110.49 million in 2020 to $156.83 million for the period under review. Taxation for the year amounted to $40.17 million, up from $23.71 million in 2020.

However, net profit for the September quarter fell to $41.42 million in 2021 relative to $74.97 million in 2020.

Salada Foods management explained, “The company suffered the deleterious effects of complying with the Jamaica Agricultural Commodities Authority (JACRA) regulations for a 30 per cent locally grown coffee quota, ongoing supply chain disruptions and increasing freight costs. However, the negative impact was mitigated by relying on built-up inventory of raw materials and lower cost beans.”

Net profit attributable to shareholders amounted to $156.83 million relative to $110.49 million booked twelve months earlier. Total comprehensive income for the year amounted to $155.45 million versus $65.85 million in 2020.

New products drove up revenues

Revenues recorded an 11 per cent increase to close at $1.19 billion coming from $1.07 billion in 2020. The movement was brought about by, among other things, “the successful introduction of new, non-coffee products, namely the Jamaica Mountain Peak Ginger Turmeric Tea and continued strong export sales”.

For the fourth quarter, revenue amounted to $299.71 million (2020: $248.38 million), a 21 per cent rise year-over-year.

Cost of sales for the year increased by seven per cent to close the period at $828.53 million relative to $772.64 million in 2020. As such, gross profit amounted to $361.21 million, a 22 per cent growth year-over-year from the $295.30 million booked in the prior year.

Gross profit for the quarter posted a 42 per cent increase to close at $90.53 million relative to $63.98 million booked for the comparable quarter in 2020. Administrative expenses fell by seven per cent to $125.72 million (2020: $135.67 million).

Also, selling and promotional expenses increased by 18 per cent from $44.34 million in 2020 to $52.43 million for the period under review. The management noted that the increase in expenses was, “In support of new products and shifting market trends from bottles to sachets. Consumers reduced their media consumption patterns while adhering to various COVID-19 restrictions forcing the team to develop innovative tactics to gain or maintain their attention.”

Consequently, this resulted in an operating profit before other income, net finance cost and taxation of $182.13 million, up 44 per cent compared with the $126.69 million reported for the prior year. The company reported other income of $1.19 million (2020: $12.81 million) and net finance income of $15.71 million for the period compared to the net finance income of $8.71 million for 2020.

Balance Sheet at a glance:

As at September 30, 2021, total assets rose by 13 per cent to end at $1.27 billion (2020: $1.12 billion). This increase was primarily driven by inventories which amounted to $528.87 million (2020: $405.27 million). This was mainly tempered by a decrease in ‘Cash and cash equivalent’ by 32 per cent to $116.45 million compared to the previous year’s total of $170.86 million.

Shareholders equity as at September 30, 2021, amounted to $1 billion (2020: $957.12 million) resulting in a book value per share of $0.97 (2020: $0.92).