Everything Fresh Limited has seen its half-year profits for 2023 double and has credited the "strong results" to the continued growth in the tourism industry. However, its Bahamas operation saw a dip in revenues.
For the half-year Everything Fresh recorded 32 per cent year-on- year increase in revenue which totalled $1.67 billion as at June 30, 2023 when compared to the $1.26 billion for the corresponding period last year. At the same time, the company's quarterly revenue jumped to $826.72 million or by 13 per cent over the same period a year ago.
"This overall increase was mainly due to the continued resurgence in the tourism sector in both countries, and less supply chain challenges in 2023 as compared with 2022, when COVID-related backlogs in production and shipping capacity were still causing delays in the movement of investory," Managing Director Courtney Pullen wrote to shareholders in a report attached to unaudited statements.
Everything Fresh's larger operation in Jamaica contributed the lion's share of revenue for the half-year, which grew by 44 per cent to $1.39 billion, while in The Bahamas sales fell off by 5 per cent below $296.61 million earned last year.
Responding to Jamaica Observer queries on the dip in revenue, Chairman Gregory Pullen noted, "Sales in The Bahamas fell a little because the cost of goods and shipping, etc, were still higher due to the effects of COVID and consumers were purchasing less as a way of budgeting. All those costs are now right sizing and as a result, we are able to lower our prices to pre-COVID levels. We are already seeing an increase in sales commensurate with this action."
While the latest figures from The Bahamas National Statistical Institute shows that inflation has been trending down from 7.1 per cent reached in July 2022 to 4.0 in April this year, the data pointed out that costs for services in hotels and restaurants experienced this highest increase of 13 per cent.
At the same time, the Ministry of Tourism in The Bahamas has reported that tourism arrivals continue to fall short of 2019 pre-COVID levels, although it topped the five-million mark up to the end of June.
In the meantime, Everything Fresh's chairman told Caribbean Business Report that the company has begun to employ a similar diversification strategy to that of Jamaica, which involved targeting supermarkets and other retailers to distribute its products. Notwithstanding, hotels and restaurant continue to be the major contributor of revenue in both countries.
Here in Jamaica, the company has ramped up employment at its depot in Kingston in response to heightened demand. Everything Fresh had previously reduced capacity at that facility to focus on hotel distribution at its operation in Bog Walk, St Catherine.
"The staff ramp up at Marcus Garvey Drive was the employment of additional delivery drivers and merchandisers. That is to support the increasing product demand of our restaurant and supermarket customers," Gregory Pullen explained to Caribbean Business Report.
Both initiatives resulted in a 22.4 per cent increase in administrative and selling expenses which totalled $249.6 at the end of June.
"Further utilisation of our Bog Walk facility resulted in an increase in the related running costs for the first half of 2022 as the company transferred all hotel distribution operations and stockholding from Marcus Garvey Drive to Bog Walk. The Kingston location is now the hub of the retail arm of the business, servicing supermarkets and restaurants," Courtney Pullen told shareholders.
Net profit for the half-year more than doubled from $37.51 million last year to $78.19 million in the sixth-month period under review. Earning per stock jumped from $4.05 to 9.92.
For the quarter, the company generated net profit of $43.12 million, reflecting a 42 per cent rise over the second quarter in 2022.
Looking ahead, the managing director expects Everything Fresh to remain on a growth path.
"The outlook for the remainder of 2023 if favourable. Many of our hotel customers have already started construction of additional capacity which will be completed in time for the winter season. There are also new entrants to the hotel sector that have firm plans to begin construction and we expect to participate in supplying their needs when they commence operations," Courtney Pullen stated.
"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," he continued.