US retail sales for Blue Power soap drying up

Business

US retail sales for Blue Power soap drying up

Intense competition being faced in the Caricom market

BY DURRANT PATE
Observer business writer

Wednesday, December 02, 2020

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Having successfully penetrated the United States market with its range of soap products, Blue Power Group is seeing retail sales in America drying up.

During the first quarter of its financial year, Blue Power shipped substantial quantities of soap to the United States in order to meet the demand from new customers such as Walmart. However, the retail sales through these accounts were not yet sufficient to justify the same level of reorders for the second quarter.

In addition, the American distributors report that their warehouses have adequate stocks in inventory. In the meantime, Blue Power is facing intense competition in its main market, which is the Caribbean Community (Caricom) region.

EXPORT SALES IN CARICOM DIP

So fierce is the competition in the Caricom region that the company registered a decline in export sales for the quarter ended October 31, 2020. However, as the company begins its third quarter with the benefit of a sales manager, the expectation is that there will be some improvements in overall sales.

Blue Power chairman, Dr Dhiru Tanna, has advised that the new sales manager has been specifically tasked to drive “domestic sales and provide better coordination for export sales, as we explore the avenues for the introduction of new products”.

For the just-ended October quarter, overall sales from continuing operations for the company was $151.99 million, representing an increase of 35 per cent over the prior year.

This amount included new sources of income not available in the previous year.

SMALL PROFIT RECORDED FOR OCTOBER QUARTER

Profit before tax went up to $22.38 million, which produced an overall profit of $16.78 million after the deduction of $5.60 million of estimated tax at the standard rate. For the six-month period, profits from continuing operations amounted to $49.89 million, down from the $51.58 million recorded for the same period last year.

This includes a substantial provision for estimated credit losses and additional expenses for staffing the administration to handle the accounting functions of Lumber Depot Limited, a subsidiary of the group.

In his chairman's remarks, accompanying the company's October unaudited financial results, Dr Tanna reminded that Blue Power graduated from the junior market of the Jamaica Stock Exchange as of April 2020 and is therefore now operating without the 10-year tax incentives for companies listed on the junior market.

As such Blue Power is liable to the full rate of income tax, which is estimated in the unaudited financial statements presented.

In closing, the Blue Power chairman remarked, “We continue to remain vigilant with respect to the COVID-19 virus and look forward to the return of normalcy as we send greetings to our customers and shareholders for a safe and healthy Christmas season.”


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