MICHELLE Chong, chief executive officer (CEO) of baked goods company Honey Bun Limited, said that despite reduced margins seen during the first quarter, profits for the three-month period ended last December grew to $45.5 million — 31 per cent above the comparable period of the previous year.
Driven by significant demand for its “Shorty” bread products, sales from which the company said had increased by more than 20 per cent year on year, top-line growth for the company also generated strong revenues of $664.7 million — 44 per cent more than that of the prior year.
“The company lost 4.7 per cent in margins due to significant price increases on all inputs, supply shortage and shipping delays and costs,” she told shareholders in the company's quarterly report.
“During this pandemic, amid rising prices and increased economic uncertainties, we will continue to pivot ourselves — through innovation and operational efficiencies — to generate sustained and increased revenues quarter on quarter,” she further said in response to questions from the Jamaica Observer.
The local manufacturing sector – which has been feeling the pinch of rising inputs for goods and commodities traded globally – in recent times has had to contend with sharp increases in some key inputs such as oil and other raw materials needed for production. Just last month the Jamaica Flour Mills announced an increase in flour prices. This would mean a rise in the prices for most baked goods and other commodities made from flour and flour-based products.
“We do continue to expect reducing margins, howeveras prices soar we will have to be extra ingenious as to how not to pass it on to our customers. We will have to get more granular and creative,” Chong said to the Business Observer.
She said that with the company heavily focused on building operational efficiencies, significant investments of some $35 million was made during the quarter to improve property plant, equipment and to offset software and business intelligence upgrades. The company back in 2020 had also acquired additional property which it said would be crucial to its operations.
“Production capacity and logistics management are vital to our business and operational efficiency, as such the new property will be used to increase our capacity and for warehousing/storage,” Chong noted.
In her outlook for the remaining quarters the CEO was very optimistic, anticipating further increases in sales as schools reopen fully and as the Easter period draws near.
“Our aim is to strengthen our current markets and to enter new ones by the end of 2022. There are some really cool plans in store for our customers,” she said.
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