SALADA Foods Jamaica Limited posted higher profits in its latest financial year, but a sharp fall in cash and a heavy build-up of inventories show how rising costs, foreign exchange volatility, and climate risks are reshaping the finances of Jamaican manufacturers.

For the year ended September 30, 2025, the coffee and beverage producer reported net profit of $171.5 million as revenue rose 7.9 per cent to about $1.6 billion. Gross profit increased to $487.9 million, with margins holding broadly steady despite persistent inflationary pressures.

Behind the solid earnings performance, however, the company’s cash position weakened sharply. Cash and cash equivalents fell to $154.6 million from $272.5 million a year earlier, while inventories climbed to $552.5 million from $420.6 million. In practical terms, the company is holding significantly more raw materials and finished goods than a year ago, tying up cash to ensure production can continue if supplies are disrupted.

The shift reflects a deliberate strategy to secure key inputs early in an environment of elevated global coffee prices, volatile exchange rates and growing climate-related risks. Salada said higher costs for green coffee beans, packaging materials, utilities and logistics continued to pressure manufacturers, forcing greater emphasis on procurement discipline and inventory management.

That defensive posture was underscored by Hurricane Melissa, which struck Jamaica in late October, shortly after the end of the financial year, damaging farms and agricultural supply chains. While Salada expects no immediate disruption to production because of advance purchases and existing stock levels, it said longer-term effects on future crop cycles are still being assessed.

The inventory build-up coincided with increased capital spending. Salada invested $67.1 million during the year in machinery, equipment and work-in-progress assets, lifting the net book value of property, plant and equipment to $165.9 million. The company also paid dividends totalling $130.9 million during the year, further drawing on cash resources.

Despite the pressure on liquidity, core operations remained profitable. Operating profit reached $218.9 million, implying an operating margin of about 13.7 per cent, while gross margin held at roughly 30.5 per cent, suggesting the company was able to pass through some cost increases or absorb them through efficiency gains.

Revenue growth during the year was driven overwhelmingly by the domestic market. Local sales rose to $1.30 billion from $1.16 billion, reflecting strong demand across the company’s product portfolio. Export sales, however, declined to $304.3 million from $322.1 million, highlighting the company’s continued reliance on the Jamaican market even as it seeks to expand abroad.

The softer export performance comes as Salada pushes to deepen its presence in regional markets and the United Kingdom, part of a broader effort to diversify revenue sources and reduce exposure to any single market. For now, domestic demand continues to do most of the heavy lifting.

Looking ahead, management has signalled that diversification beyond traditional coffee products is central to its longer-term strategy. In recent years, the company has expanded into functional beverages made from locally sourced ingredients such as ginger and turmeric, and after the end of the financial year launched a sorrel- and hibiscus-based drink aimed at health-conscious consumers.

The shift is intended to reduce reliance on volatile coffee inputs while broadening the appeal of the brand, particularly among younger consumers. Salada has said its established brands, product innovation, and focus on operational efficiency support a positive outlook, even as manufacturers face tougher trade-offs between resilience and cash generation in an increasingly unpredictable operating environment.

Tamii Brown, general manager of Salada Foods Jamaica Limited. The company said it continues to focus on managing costs, strengthening supply resilience and expanding its product range amid rising input prices and climate-related risks.