CARIBBEAN Cream Limited (Kremi) is bracing for a short-term dip in sales following Hurricane Melissa.

Managing Director Christopher Clarke told shareholders at Monday’s annual general meeting that sales are expected to soften in the coming weeks, as ice cream is not viewed as an essential item in the post-storm period. The company’s Montego Bay depot was among the worst hit, losing its roof and several electrical components, forcing management to divert resources to repairs while maintaining supply through its other depots.

Despite the setback, Clarke said the company intends to use the lull in sales activity to rebuild inventory for the Christmas season — a period that typically delivers Kremi’s strongest demand.

The update comes on the heels of a challenging half year in which revenue rose nine per cent to $1.63 billion, but higher labour, logistics, and lease costs pushed the company into a net loss of $9.4 million for the period ended August 31, 2025. Cost of sales climbed 20 per cent to $1.14 billion, driven mainly by contract labour and waste disposal expenses, while gross profit slipped nine per cent to $493.75 million.

The results extend a trend of rising costs that eroded margins last year when the company managed only a $17.8-million profit despite nearly $3 billion in sales. With input and efficiency pressures persisting, Kremi’s ability to reverse its first-half loss will depend heavily on how quickly its internal cost-control measures take hold.

The company’s current assets total approximately $2.05 billion, while equity stands near $866 million, giving it a relatively strong financial base to absorb short-term shocks. But with ice-cream demand subdued during recovery efforts, efficiency gains and cost containment will be critical.

At the annual general meeting Clarke outlined several steps to improve efficiency and protect margins. Chief among them is the near-completed well project, which will secure a stable, independent water source for both production and sanitation. Water is a critical input in the company’s ice-cream mix and cleaning systems, and management expects the project to reduce input costs and mitigate operational disruptions tied to municipal supply.

Kremi has also restructured its production shifts, moving from two six-day schedules to three shifts over five days each week. The change has increased productive hours by roughly 35 per cent and is expected to improve throughput at the company’s Kingston manufacturing plant.

Clarke told shareholders that Kremi continues to face tight competition for skilled workers, particularly technicians and quality-control personnel — a challenge that has weighed on productivity across the manufacturing sector. He said the company is focusing on stabilising its workforce and maintaining consistent stock availability through third-party distributors.

The storm’s damage now adds another layer of complexity, with the Montego Bay depot requiring substantial repairs. While some locations remain on backup power, Clarke said Kremi has begun assessing its independent depots islandwide to determine its status and the level of support required.