By Julian Richardson Assistant Business Co-ordinator email@example.com
Blue Power Group more than doubled first quarter profits to $24.8 million behind strong growth in its soap division.
Total revenues were $232.65 over the period ending July 31, 2012, an 11.6 per cent increase from the corresponding period last year. This was led by a 24 per cent jump in sales in the soap division to $78.8 million, reported the Kingston-based soap manufacturer and hardware distributor.
"In the Blue Power soap division, our sales of bath soap more than doubled, resulting in improved performance and better margins," said company chairman Dhiru Tanna.
The soap division, which is located on Victoria Avenue, manufactures the popular Blue Power cake laundry soap and Taya bath soap bars. Profit in that segment increased from $5.68 million in the July 2011 quarter to $11.47 million over the period under review.
Sales increased by 6.1 per cent in Blue Power's lumber division, which retails building materials — including cement, steel, lumber, plumbing and electrical supplies — from a depot located in Papine. The lumber segment more than tripled first quarter profits to $13.3 million over the review period, with growth in the bottom line attributed to prior year adjustments of approximately $3 million, savings in inventory costs arising from strategic advance purchases amounting to $2 million, and more emphasis on margins.
Tanna has high expectations for the Blue Power group going forward and is particularly optimistic about upcoming sales of soap.
"The cash position of the company remains healthy although the level of our inventory has risen in preparation for increased sales in the Blue Power soap division," he said.
The Blue Power boss, however, said the prospects for the lumber division going forward are sluggish.
Jamaican hardware suppliers continue to be impacted by the weak economy and the slowdown in the construction sector.
Following on contraction in the first quarter, the economy saw 0.1 per cent year over year growth in April to June, reported the Planning Institute of Jamaica (PIOJ) last week.
The planning agency said the construction sector was one of the biggest drags on the economy over the period, declining by 3.2 per cent.
The PIOJ is projecting that the economy could contract by as much as 0.5 per cent for the current quarter, which ends in September 30, albeit, with the possibility of 0.5 per cent growth on the more optimistic side of the forecast.