Tuesday 27 October, 2020

CPJ optimistic about COVID-19 solution

The management of Caribbean Producers (Jamaica) Limited is optimistic that “a solution to the coronavirus (COVID-19) will be available soon”.

They believe this solution will restore confidence in travel from December 2020 to March 2021 and beyond.

In the report to shareholders for the year ended June 30, 2020, management said, COVID-19 official travel bans and restrictions continue to disrupt global economic activity on an otherwise booming travel and tourism sector.

The company, which supplies food to the hospitality sector, saw group sales plummet from March 2020 and continued to be adversely affected until the end of the fiscal year June 2020, impacting sales and profitability for the third and fourth quarters.

As a result, CPJ’s sales in Q4 of the fiscal year 2020 stood at US$5.78 million, down 79 per cent compared to Q4 of fiscal year 2019.

Quarters three and four are typically CPJ’s most profitable trading period, te company noted.

Sales for the entire fiscal year totalled US$91.70 million, down 16 per cent compared to the last fiscal year 2019.

The decline in revenue for this period was observed both in onshore and offshore operations.

CPJ’s  earnings before interest, taxes, depreciation and amortization (EBIDTA) for the first six months of the current fiscal year 2020 had improved significantly over the same period of the prior year 2019, increasing from US$1.64 million to US$3.32 million.

With the impact of COVID-19, the group’s EBITDA for the current fiscal year recorded a decrease of US$1.9 million, when compared to the prior fiscal year 2019.

Management said that with the easing of the travel restrictions and bans beginning June 2020, CPJ Group has seen some increased demand for products and services in the first few months of the fiscal year 2021.

Meanwhile, the company has implemented aggressive debtors management coupled with inventory containment, resulting in a decrease in current assets by US$12.82 million. Accordingly total assets also decreased by US$14.91 million.

Management said also that prudent creditors and cash flow management resulted in decrease in total liabilities by US$10.02 million over the last fiscal year.

They indicated that the group continued to “demonstrate sound treasury management during these turbulent times with a current asset to liabilities ratio of 2.46:1 compared to 1.91:1 for the last fiscal year, before IFRS 16 calculations.”

What’s more, the slowdown in the sales activity due to the ongoing pandemic has assisted the company in the implementation of the new information technology initiatives.

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