By Ashford W. Meikle, Staff ReporterMAJOR COFFEE exporter, Salada Foods Jamaica Limited, has posted a 15 per cent increase in its sales according to its unaudited financial statements to September 30, 2004. With a $33 million increase, sales grew to $249 million.
Processing coffee since 1958, Salada is the largest of the four coffee processing plants in Jamaica and, according to its website, "one of the two soluble coffee processing plants in the Caribbean." Its popular brands include the Jamaica Mountain Peak and Sherriff brands of instant coffee as well as the Salada cocoa mix.
An overall assessment of Salada's financials reveals that the company seems to have made a concerted effort to contain costs and employ efficiency controls. For example its production costs increased by just 13.5 per cent, to $153 million (compared to the $135 million last year). As a result of this, there was a fairly decent increase in the company's gross profit which went to $96 million, a jump of almost nineteen per cent.
OPERATING EXPENSES
However, it is in its operating expenses that strict cost control is evident. For example, grouped together, administration expenses and selling and promotional costs increased by only ten per cent, moving from $62 million in 2003 to $68 million for the period under study.
There were, however, slight differences in the individual expenses. For example, the company had a dramatic cut in its selling and promotion costs which experienced a 31 per cent fall. Compared to last year when the company spent $10 million, this year only $7 million was spent.
At the same time however, there was an 18 per cent increase in administrative costs which jumped to $61 million compared approximately $52 million last year.
STRICT COST CONTROL
In any event, with strict cost control and management along with the four-fold increase in income from other operating activities (the company earned $1.3 million this year) Salada was able to return a respectable fifty per cent increase in its operating profit which leaped to $29 million (in contrast to the $19 million earned last year.)
There was, however a six per cent decline in finance income, which fell to a little over $7 million. Notwithstanding the dip in income from investments, Salada returned a 35 per cent increase in its pre-tax profit which went to $36 million.
After paying the taxman, returned net profit of $25 million, an increase of 45 per cent (last year it posted net profit of about $18 million). Its earnings per share increased to $2.32, a 41 per cent increase.
Salada was one of the least actively traded stocks on the Jamaica Stock Exchange last year. Trading on the JSE amounted to a little over 262,000 units (with a total value of $5.3 million) in 2004.
Note: Approximated figures
