Seprod reboot pays off at the bottom line
Food conglomerate Seprod Limited made $126.8 million net profit for its third quarter, reversing losses from a year ago.
Over nine months ending September, the company earned $942.8 million. That's up 151 per cent year on year, a performance reflecting benefits from new products launches, sugar sales and the reduction in sugar plantation expenses.
CEO Richard Pandohie said the third-quarter performance was "significantly better" with a 10 per cent increase in revenue and a significant turnaround in profit before tax and earnings per share.
"The company's export portfolio, led by sugar to the CARICOM markets, has grown by more than 35 per cent. The innovation pipeline in the dairy operations is flowing nicely with the company launching lactose-free milk, evaporated milk and sweetened condensed milk in 2016. The emphasis in improving productivity is bearing fruit and the Seprod team remains committed on this path as we strive to ensure that our operations are globally competitive to drive export sales and import substitution," he said.
JAMAICA GRAINS FACTOR
Over nine months, Seprod revenues at $11.1 billion actually dipped from $11.2 billion, due to price reductions.
"Despite a marginal reduction in revenue driven by the company reducing prices of biscuits to consumers and the removal of Jamaica Grain's revenue from the consolidated results due to its new status as an associated company, the company generated robust increase in both gross profit and profit before tax," said Pandohie, adding that it's indicative of improved efficiencies that arose from significant retooling of most operational units.
The retooling included the installation of a new packaging line at Serge Island Dairies, installation of an irrigation system at Serge Island Farms and the installation of a new oven at International Biscuits. Additionally, the restructuring at Golden Grove Sugar factory coupled with it being granted marketing agency status from the Government has allowed it to reduce its losses by more than half.
"The strong performance of the investment portfolio has also contributed to the more than doubling of the profit before tax over prior year," stated Pandohie.
At the end of September, Seprod reported group equity of $11.4 billion on total assets of $12.7 billion.