Seprod credits acquisition of Facey Consumer Division, exports growth for bumper 2019 figures

Business

Seprod credits acquisition of Facey Consumer Division, exports growth for bumper 2019 figures

One-off costs related to Golden Grove closure impacted financials

BY DURRANT PATE
Observer Business Writer

Wednesday, February 19, 2020

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The Seprod Group is now reaping the benefits of its acquisition of the Facey Consumer Division and an uptick in export for its bumper revenue out-turns for 2019.

These positive outcomes have resulted in an $11.8-billion increase in revenues for Seprod, a leading manufacturer and distributor in Jamaica.

In its interim 2019 financials posted on the Jamaica Stock Exchange website, Seprod reports that it ended the year with strong earnings of $34.35 billion, or 53%, over 2018.

Net profit from continuing operations for the year was $1.99 billion, an increase of $510 million or 34% over 2018.

The increase in profits from continuing operations was due in large part to efficiencies gained from internal reorganisations of the ingredients and distribution businesses, and the consolidation of the dairy business.

During 2019 the management of Seprod executed on its previously communicated decision to close the Golden Grove sugar factory. In so doing, management curtailed the 10 years of operational losses from sugar manufacturing.

This move will positively impact the group's return on equity and its cash flows in the future. The losses from this discontinued operation (inclusive of redundancy payments and estimated impairment losses) amounted to $814 million.

The resulting net profit for the year was $1.18 billion, an increase of $119 million or 11% over 2018.

The 2019 financial result was impacted by several one-off costs related to the Golden Grove closure as well as the dairy consolidation.

In its 2019 interim figures, Seprod reports that 2019 was a year of consolidation for the group.

Company Chairman Paul B Scott and Chief Executive Officer Richard Pandohie say, “the difficult decisions taken have placed the group in an excellent position to generate sustainable value creation for 2020 and beyond”.


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