Second quarter profit dips for Caribbean Flavours

Friday, August 23, 2019

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Caribbean Flavours and Fragrances Limited (CFF) reported on Wednesday last (August 14), an unaudited after-tax profit of $23.3 million, for the second quarter ended June 2019, despite a 20.6 per cent decrease, due to seasonal purchases from manufacturers.

Chairman Howard Mitchell in reporting to shareholders, indicated that CFF's sales for the quarter under review amounted to $113.746 million, representing a marginal decrease of $6.960 million or 5.8 per cent, when compared with the $120.706 million recorded in the prior corresponding period.

However, sales generated for the six-months period ended June 30, 2019 was $226.33 million, an increase of 8.07 per cent when compared to the $209.43 million recorded for the corresponding period in 2018.

“Sales continue to be heading in the right direction, despite lower than anticipated sales of some new products during the quarter,” Mitchell stated.

“We anticipate that our sugar reduction solution will continue to be accepted in the market, and this will positively improve future sales and profitability,” he continued.

He added that CFF is going to continue refining its strategies and improving various cost structures in order to drive the desired efficiency while improving cost of sales and gross profit.

The chairman indicated that fluctuations in the foreign exchange rates as well as increased logistics costs negatively impacted CFF's gross profit for the quarter under review; as such, gross profit amounted to $47.208 million, representing a 4.2 per cent decrease when compared with the $49.370 million reported for the corresponding period in 2018.

“It is important to note that the company's 100 per cent remission of taxes expired in October 2018, and as such, profits are now subject to a 50 per cent of remission taxes to October 2023,” Mitchell stated in the report.

A local manufacturer of a wide variety of flavourings and colourings for the food and pharmaceutical industries, and scents for cleaning and body care items among others, Mitchell added that CFF continues with the implementation of business plans, which are anchored on the pillars of revenue growth and expense management in order to deliver on the desired results.

“Caribbean Flavours and Fragrances continues to work to ensure that we become a more solution-driven organisation as we seek to explore and gain more acceptance in new markets, such as Cuba, as well as deepening our presence in many of the local and overseas markets,” he said.

He added that CFF expects this to generate positive benefits in the short to medium term.

Earnings per share ended at $0.26, a decrease compared with the $0.33 recorded in 2018. — Abbion Robinson


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