Performance led by 45% increase in export sales 

Durrant Pate/Contributor

Jamaica’s manufacturing conglomerate, Seprod Group has registered a strong half-year performance (January to June 2023) with a big surge in revenues.

Seprod achieved revenues of J$54.46 billion, up J$26.65 billion or 96% over the corresponding period in 2022 while net profit amounted to J$2.54 billion, representing an increase of J$963 million or 61% over the prior period. The improved business performance remains consistent with the strong returns experienced during the first quarter (January-March 2023).

Driving this continued growth during the half-year were a 45 per cent increase in export sales and continued growth in business post its Trinidadian acquisition of A.S. Bryden Group in June 2022. This is in addition to the elimination of third-party warehousing costs following the activation of the new logistics centre and significant progress in the modernization of the margarine plant, which has led to improved availability of key stock-keeping units (SKUs), such as Goldseal. 

Increased operating costs

During the combined two quarters, operating costs have gone up due mainly to the fact that there have been material price increases in security, insurance, interest expense, wage-related expenses and distribution costs. However, this was partially offset by the benefits of reductions in global shipping costs and in price reductions of key commodities, such as wheat and oil. 

In spite of this, the group continues to pass on price reductions to retail and business customers as the opportunity arises, particularly from its manufacturing facilities. For the second quarter (April to June 2023) Seprod achieved revenues of J$27.39 billion, an increase of J$11.40 billion or 71 per cent over the corresponding period in 2022 while net profit went up to J$1.19 billion, an increase of J$202 million or 20 per cent over the prior period. 

Other financial highlights

Finance costs for the six months amounted to J$1.44 billion, a 76% increase relative to J$819.86 million reported in 2022. Share of results of associates and joint venture for the six months amounted to J$136.40 million, a 147% increase relative to J$55.26 million reported in 2022. 

Profit before taxation totalled J$3.23 billion, a 56 per cent increase from the corresponding period last year (2022: J$2.07 billion). As a result, net profit attributable to shareholders for the half-year amounted to J$1.89 billion, a 28 per cent increase from the J$1.48 billion booked a year earlier.

Earnings per share (EPS) for the review period totalled J$2.57 (2022: J$2.02), while EPS for the second quarter amounted to J$1.23 (2022: J$1.20). Notably, Seprod’s stock price closed trading yesterday (August 14, 2023) at a price of J$69.96 with a corresponding P/E ratio of 15.27x.

The company’s assets totalled J$91.27 billion (2022: J$78.07 billion). This increase was largely due to inventories, which grew 37 per cent from J$17.85 billion in 2022 to J$24.39 billion in 2023. Shareholder’s equity was J$29.95 billion (2022: $27.51 billion), representing a book value per share of J$40.82 (2022: J$37.50).

Delay in filing 2022 audited financial statements

The management of Seprod is admitting to a delay in the filing of the audited financial statements for the year ended December 31, 2022, due to issues arising entirely from a change in the financial year end of A.S. Bryden from March 31 to December 31 to align with that of the rest of the group and a change of auditors of A.S. Bryden to be consistent with the rest of the group. 

The management reports that the group is now at the end of the audit process and will publish Seprod’s audited results on or before August 31, 2023 declaring that it remains confident that the company will deliver an outstanding year.