Higher costs of sales and rain depress profit for Caribbean Cream

 


Caribbean Cream Limited (Kremi) for the nine months ended November 30, 2024 posted revenues of $2.2 billion, up from $1.9 billion in the corresponding period in 2023.

Revenue for the quarter was $686 million when compared to the same period of the previous year of $630 million.

However escalating costs and months of rainfall which affected demand cut into profit. Costs and write offs resulted in profits before tax at the end of the third quarter of $2.9 million down from $47 million in the prior year.

With continued rainfall over several months, sales for the third quarter were curtailed. Meanwhile cost of sales for the nine months grew by $194 million to $1.4 billion, reflecting a 15 per cent increase over the previous year's $1.2 billion.

The third quarter's result was $498 million versus $394 million, an increase over last year of $105 million or 27 per cent. This high cost of sales was due to an increase of the maintenance of manufacturing equipment and a write-off of inventory.

At $729 million, gross profit was up 16 per cent for the nine months despite a $49 million (21 per cent) reduction in the third quarter which ended at $188 million.

Meanwhile, administrative and other operating expenses for the nine months were up $146 million to $730 million, a 25 per cent increase. For the quarter, expenses totalled $231 million versus last year of $203 million. The increase of $28 million or 14 per cent was largely due to higher maintenance and security related expenses.

Notwithstanding, total non-current assets rose by 5 per cent year-over-year, from $1,783 million to $1,873 million. Current assets increased to $597 million.

The company has added a new cold room which managers state positions it “to supply the market with a wide variety of ice cream and novelties to meet market demand.”

Inventory balance increased by 12 per cent to $293 million, and trade and other receivables increased to $232 million, a result of a significant amount current credit sales occurring at the end of the quarter.

Total current liabilities increased by 113 per cent or $217 million, which included an increase in accounts payable to $316 million.

Long term loans increased by $64 million or six per cent as Kremi made a final drawdown on a bank loan facility towards the completion of capital projects.

Caribbean Money Daily

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