Seprod aims to outperform solid first quarter by doubling exports
Revenue fell but profit climbed by double-digits at manufacturing powerhouse Seprod Limited in the first quarter.
Net earnings rose 17 per cent to $222 million, even with a fall-off in group sales, which were down 10 per cent at $3.68 billion. Profit in the prior year March quarter totalled $189 million, from sales of $4.09 billion.
CEO Richard Pandohie believes he can deliver even better results.
"Even with the 17 per cent, management is targeting much more than that for year-on-year growth in 2016," he said.
He likened Seprod's 2015 performance to that of a 'pit stop' in motor racing, where new tyres are put on, the engine fine-tuned and fuel is added to the tank. Pandohie says what is happening now is the fruit of all the changes made last year.
"We basically were trying to change the business and put things in place," said Pandohie. "What they are seeing now for this first quarter is the manifestation of the retooling and restructuring that took place."
Pandohie took over the reins of Seprod at the end of 2014, declaring that 'Within Seprod, we are not quietly optimistic we are loudly optimistic' as he signalled his intention to grow through acquisitions, restructuring and retooling.
He is currently executing a $5-billion programme across the group. Some of the spend have included upgrades to the beverage plant at Serge Island Dairies and the restructuring of the sugar operations; and one of the most recent projects, a $285-million upgrade to the biscuit operations, was put on display two weeks ago.
"For us, a lot of the tough decisions have been made, a lot of the clean-up has been done and going forward, you're going to see some strong performance out of the group," Pandohie said.
Part of the stated growth strategy was a significant boost in exports. Seprod had inked a distribution deal with GK Foods designed to deepen its own penetration of the North American market.
However, Pandohie says that even though the first quarter produced solid results, Seprod underperformed in exports.
However, he is predicting that the group will double its annual exports by the end of 2016. saying the ongoing push for cross-border sales had been interrupted temporarily by the ongoing internal changes.
"The first-quarter results did not include strong export numbers because of the fact that retooling had taken place in both the international biscuit plant that just reopened in April, and completing some retooling in Serge. So we actually lost significant business in the first quarter that we will pick up in the second quarter," Pandohie predicted.