The wonderful aroma of increased profit brewed by Salada Foods ended with an impressive 43 percent jump in earnings in the March quarter, to $68 million from $48 million in 2023. For the six months to March, profit rose by a more sedate but still impressive 31 percent to $99 million from $75 million in 2023.
The latest results follow a moderate rise in profits in 2022 and 2023 and a 42 percent jump in 2021.
Contributing to the gains in profits was an 8 percent rise in sales revenues for the quarter, to $427 million from $394 million and a 6 percent pop for the year to date, to $727 million from $688 million in 2024.
Gross profit margin slipped to 68 percent from 69 percent in both the second quarter and for the half year, effectively, pushing operating profit 13 percent in the quarter to $138 million from $122 million and 6 percent for the year to date to $229 million from $216 million in 2023.
Increased revenues were not the sole contributor to the solid rise in profits. Administrative expenses fell 11 percent to $36 million in the quarter and slipped two percent in the six months to $74 million. Marketing and sales expenses dropped by a sizeable 29 percent to $17 million for the second quarter and declined by 28 percent for the six months to $32 million. Finance cost jumped to $6 million in the quarter, from $1.4 million in 2023 and from $3.5 million to $7.6 million for the six months.
The operations generated gross cash flows of $189 million after working capital spend and ended with $95 million after paying $62 million in dividends.
Current assets ended the period at $1.2 billion inclusive of trade and other receivables of $305 million, cash, investments and bank balances of $492 million, inventories climbed to $417 million from $374 million at the end of September last year. Current liabilities ended the period at $291 million. Net current assets closed the period at $923 million.
At the end of March, this year, shareholders’ equity amounted to $1.13 billion, with no outstanding loans.
Earnings per share for the quarter was 7 cents and 10 cents for the year to date. IC Insider.com computation projects earnings of 22 cents per share for the fiscal year ending September 2024, with a PE of 16 times the current year’s earnings based on the price of $3.76 the stock traded at on the Jamaica Stock Exchange Main Market. The PE ratio compares with an average of the market of 12.9. Net asset value ended the period at $1.09 with the stock selling at 3.44 times book value.
