Everything Fresh benefiting from tourism rebound

As tourism arrivals in the Caribbean continue to recover to pre-pandemic levels, Everything Fresh has reaped the rewards in Jamaica and The Bahamas where both countries have seen improved earnings compared to last year.

The group's consolidated revenue for the third quarter grew 29 per cent year over year from $494.71 million to $636.60 million with the company's revenue increasing 44 per cent to $516.30 million. The group primarily distributes dairy products and other delicatessen meats to supermarkets and hotels across Jamaica including from brands such as Dannon, Provecho and King's Hawaiian.

"Sales will increase in the new year as hotel occupancies continue to be strong. We have already diversified considerably as part of our response to the economic stresses of COVID and we continue to keep our eyes peeled for further opportunities," said Chairman Gregory Pullen in an e-mail to Jamaica Observer.

Despite air traffic at the Sangster International Airport being nine per cent below January to October 2019 figures at 3.54 million passengers, every month past May, excluding July, has seen passenger traffic surpass 2019 levels at double-digit levels. Stopover arrivals into Jamaica remain 90 per cent above 2021 figures between January to August at 1.65 million visitors, but just 12 per cent below the 1.88 million visitors in the 2019 period as per tourismanalytics.com.

Managing Director Courtney Pullen shows his wife Melene Rose Pullen a seafood package. Everything Fresh

Everything Fresh converted a loan and gained a 60 per cent stake in Everything Fresh (Bahamas) Limited in June 2021 before increasing its stake to 80 per cent in April for $155,000. Despite the subsidiary recording a loss of $335,000 in the third quarter, The Bahamas subsidiary brought in $416.92 million in revenue and an estimated $29.29 million in net profit.

Although Jamaica is seeing a faster resurgence in tourism arrivals, The Bahamas is still 23 per cent below 2019 levels in air traffic at 892,738 passengers with stopover visitors 35 per cent below at 698,672 visitors.

"The performance of the Bahamian subsidiary has met our expectations so far and will continue to grow in 2023," Pullen added.

Everything Fresh's consolidated revenue for the first nine months is up 76 per cent to $1.90 billion with the consolidated net profit coming in at $46.55 million compared to the net loss of $20.39 million in 2021. Although the company's revenue performance is above 2019, the net profit of $29.08 million in 2022 still trails the $36.74 million earned in 2019. The company will begin paying income tax at 50 per cent of the normal rate in June 2023.

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When asked about the impact of the foreign exchange rate and inflation, Pullen replied, "All US dollar prices from our suppliers have increased. Wherever possible, we have increased our selling prices while trying to remain competitive."

Pullen also told Sunday Finance that the company is currently refinancing short-term debt in the current quarter with lower cost long-term debt. Everything Fresh currently has $286.79 million in borrowings listed as current liabilities which was issued initially as variable debt at 6.5 per cent from First Global Bank Limited and JMMB Bank (Jamaica) Limited. The Bank of Jamaica has increased its policy rate over the last year from 0.5 per cent to 7.0 per cent.

The company will also be reducing its rented warehouse space in Kingston as it restructures its portfolio of warehousing assets from Kingston to its meat plant in Bog Walk, St Catherine. This is meant to satisfy the increased warehouse space needed for its growing sales.

The company had purchased the assets of The Meat Experts — which has an abattoir including the cutting, processing, packaging and cold-storage facilities — in January 2019 for $50 million. The company had $30 million in planned upgrades for the plant which was underutilised with gross margins not hitting the break-even point in the initial year of acquisition.

Everything Fresh exited the production of pork and the associated by-products in February 2020 before shutting down the production plant in April 2021. The company reported a $19.04-million loss related to this segment, which will no longer be reported in 2023. The trading division, however, had a net profit of $48.12 million which is above the $36.74 million reported in 2019.

Total assets for the group are up nine per cent year over year to $997.67 million with current assets making up the bulk of it at $725.83 million. Total liabilities and equity attributable to shareholders are $637.54 million and $365.81 million, respectively.

The company's stock price is up 52 per cent year to date at $1.45, resulting in market capitalisation of $1.13 billion. Stocks and Securities Limited (Alpha) sold 11,541,387 shares at $1.28 on September 22 while PAM – Pooled Equity Fund became the number three shareholder with 9,262,784 shares.

"Many hotels are projecting high levels of occupancy for the upcoming winter season. As such, our group of companies will continue to keep up with the demands of the tourism industry by providing quality products at competitive prices. The prospects are good for 2023, with our tourism industry customers as well as for the retail side of our business, as both continue to grow," said Managing Director Courtney Pullen in the quarterly report.

BY DAVID ROSE Observer business writer davidr@jamaicaobserver.com

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