Despite no-movement days and curfews which had the effect of thwarting the sales-earning potential of Caribbean Cream Limited better known as Kremi), the ice cream manufacturer managed to exceed $1 billion in revenue for the first six months of its financial year.
With sales amounting to $1.03 billion for the half-year ended August 31, 2021, Caribbean Cream grew its revenue by 16 per cent or $143 million over the same period last year. The company also increased its revenue for the second quarter (Q2) to $486.25 million, reflecting $25 million or five per cent increase over the corresponding period a year ago.
Chairman Christopher Clarke, in his financial overview of the company's performance, credited the uptick to “both volume and price increases”.
“'No-movement days imposed on the country in two three-day periods of Sunday to Tuesday and during the Independence and Emancipation Day holidays eviscerated a major porton of our sales revenue. Nevertheless, we are thankful for the increase in sales,” he informed shareholders.
At the same time, the company's operating costs also increased, capping $673.76 million for the six months. When compared to $581.73 expended a year earlier, Caribbean Cream's costs jumped 16 per cent. Similarly, for the quarter, the company's input costs climbed 16 per cent over $290.17 recorded in Q2 2020.
“We experienced higher utility costs, price increases in key raw materials and increased foreign exchange rate. We also had unexpected logistics cost increases due to hemispheric shartfall in shipping containers and higher importation charges for imported novelties,” the chairman explained.
Notwithstanding rising costs, the company improved its gross profit for the half-year to $360.93 million, up 17 per cent. However, for the quarter gross profit fell by 10 per cent due to a shortafll in sales.
Of significant note, Caribbean Cream's administrative expenses rose by 32 per cent or $61 million during the six-month period over $188.27 million reported in 2020. This increase was mainly due to expenses associated with the opening of the Ocho Rios depot and COVID-19 induced costs — specifically electricity, cleaning and sanitisation, staff testing for the virus, transportation during lockdowns.
“While the company is weathering major challenges, we are so far keeping expenses within expected levels,” Clarke assured.
The additional costs, however, impacted net profit earnings for both the half-year and second quarter, which declined by $14 million and $45 million, respectively. Net profit for the six months amounted to $70 million and for the quarter, $8 million.
Despite an increase in working capital, Caribbean Cream registered a $48.72-million reduction in cash and cash equivalent, which totalled $102.86 million.
— Josimar scott