Increased cost squeezes Kremi’s profit

Caribbean Cream delivered better results in the August quarter than in May period with an increase in revenues of 18 percent versus a 1 percent increase in the first quarter.
Profit declined in the latest quarter but by 23 percent, to $35.6 million versus a 40 percent fall in for the six months to $70 million, down from $117.6 million. Cash generated from operations came in at $98 million but Kremi spent $102 million on acquisition of fixed assets.
Gross profit declined by just 4 percent in August quarter versus 14 percent in the May quarter as increase of direct cost outpaced the rise in revenues. In the end revenues came in at $354 million in the August quarter up from $319 million in the May quarter and $300 million in yin 2016 and for the six months $673 million from $615 million in 2016.
Administrative, selling and distribution expenses increased moderately from $71 million to $76 million in the quarter and form $136 million to $147 million for the half year.
At the end of August cash and equivalent amounted to $175 million and borrowed funds $90 million. Shareholders’ equity stands at $662 million.
Earnings per share for the half year is 19 cents and 9 cents for the August quarter. IC is forecasting earnings of 50 cents for the full year to February 2018 and 75 cents for 2019. The stock last traded at $6.70 for a PE of 13.4 which is in line with the Junior Market valuation.

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