Big drop in KLE Group's losses but company still in the red
Positive signal that business is heading in the right direction under Jamaica's stringent curfew hoursSunday, June 20, 2021
BY DURRANT PATE
The Kingston Live Entertainment (KLE) Group, which is reeling under the pandemic restrictions in Jamaica, has managed to shave off a considerable portion of its losses but the restaurant and entertainment business still remains in the red for the first quarter of 2021.
Total comprehensive loss for the period amounted to $22.10 million compared to $20.13 million reported for the first quarter of 2020. Consequently, loss before tax for the quarter amounted to $21.99 million relative to a loss before tax of $19.07 million in 2020.
Losses from operations were down to $6.65 million relative to a loss of $12.81 million booked for the corresponding period of 2020.
According to KLE, these results, “shows a positive signal in the right direction for the business under the stringent curfew hours imposed. There is a significant reduction when compared with the previous year, the reason for this is related to the fact that the first two months of the prior year the restaurant operated at full capacity without the effects of the COVID-19 pandemic”.
Finance and depreciation costs rose by $9.08 million, moving from $6.26 million last year to $15.34 million for the first quarter of 2021.
Battling price increases from suppliers
In its quarterly statement to shareholders KLE reports that, “during the first quarter, the company had to battle with several prices increase from several of our key suppliers. Some suppliers had multiple increases during the quarter. Also during the quarter, the rate of exchange had a significant impact on our cost strategies and on our vendor prices.”
Cost of sales of $10.84 million was recorded year to date relative to $22.10 million for first three months of 2020. The management has highlighted that, “KLE will continue to employ cost-savings strategies and monitor our key performance indicators to improve efficiencies and achieve profitability.”
Furthermore, the company stated that the decrease in Cost of Sales occurred, “as a result of the first two months of 2021 operating at maximum capacity. The companies cost of operating is in line with the latest cost strategies and budgets.”
Revenues tumble by more than 50%
Total revenue for the first quarter was $35.16 million, a 52 per cent decrease when compared with the $72.67 million reported for the corresponding period of 2020. The Kingston location recorded revenues of $23.9 million compared to the Montego Bay location of $11.3 million.
The management is confident that both locations will perform better in the second quarter of the financial year. Other operating income for the quarter totalled $16,000 coming from $3.60 million for the first quarter of 2020.
Administrative and other expenses declined by 54 per cent from $66.99 million in 2020 to $30.98 million for the period under review. The management explains that this is due to, “the decrease is directly related to the reduction in business due to the COVID-19 pandemic. Majority of our current admin expenses relates to expenses such as utilities ($5.4 million), salaries and wages ($14.3 million) and Professional fees ($1.3 million).”
2021 started well for KLE
The KLE management stated that, “the year (2021) started out quite well despite the challenges as sales saw a bit of increase from the Christmas period into late January and early February. This, however, eventually tapered off as the Government restrictions continued and got even more stringent.”
The management has made an attempt at planning using projections derived from emerging information related to the health and economic crisis we are facing. The management noted that, “it would appear that with the expectation of a vaccine and declining cases that the industry may return to some level of normalcy within the near future and we are optimistic that our usual consistent flow of revenue will return.”
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