Thu | Jan 17, 2019

Blue Power earnings double

Published:Friday | August 26, 2016 | 12:00 AMSteven Jackson
Dr Dhiru Tanna, chairman of Blue Power Group.

Blue Power Group Limited grew sales from both its soap and lumber divisions, which bubbled first-quarter 2016 net profits up 101 per cent year on year.

Earnings per stock unit for the quarter doubled from $0.33 to $0.66.

It represents one of the best quarterly performances of the group in years as it previously suffered from flat revenues.

At the same time, Blue Power continued to tout plans to embark on a multimillion-dollar expansion to add a new soap manufacturing line.

"The results reflect the achievement of improved margins in both divisions,

lower administrative costs and substantial financial income," said chairman Dhiru Tanna in a statement prefacing the financials.

The company posted net profits of $37.4 million from $338.6 million in revenue for its July first-quarter 2016 or 101 per cent higher profit than a year earlier. Revenues grew 12 per cent.

Previously the company announced that its soap sales were hurt by cheaper imports into Jamaica and also the reduced disposable income of consumers.

The contribution of lumber depot division to the after tax tally was $17 million ($7 million in 2015), while the soap division added $20 million ($12 million in 2015).

Export sales increased by over 13 per cent in the first quarter after a substantial rise in the previous year.

The Lumber Depot performed "exceptionally" well with higher sales and higher margins due partly to more construction activity in the economy and partly to better management of supplies from local and overseas vendors.

The new soap wrapping allowed the Blue Power soap division to increase sales of bath soaps although the laundry soap sales registered a slight decline.

"In terms of shelf space in retail stores, we have managed to maintain and increase our presence in the chain stores as well as individual outlets. Our advertising campaigns along with better performance by our distributor is having an effect on sales," said Tanna.

Turning to its expansion drive, Blue Power made the decision to expand based on rising sales. Tanna indicated that spending on these projects will be in the form of capital expenditure of over $30 million financed from internal resources and will be disbursed in the first half of the financial year.

"We have made the decision to reorganise the production facilities at Victoria Avenue where we will add an extra line for bathing soaps, complete the preparation and commissioning of new warehouse space and streamline the production of our laundry soap line while adding two new wrapping machines," said Tanna. "Our Castile line of single-wrapped bathing soaps will see an increase in the number of products along with a more attractive set of wrappers in the second quarter," he said.