Salada reports improved second-quarter revenues
Patrick Williams, chairman of Salada Foods Jamaica.
Coffee processor Salada Foods Jamaica is reporting higher revenues for the second quarter January to March 2019, posting $322 million in sales, 26 per cent more than it did in the comparative period.
Salada attributed the improvement to stronger sales in export markets, particularly Barbados which improved by 91 per cent when compared to the prior year to date. Domestic sales also showed favourable results.
This performance represents a comeback from reduced earnings in the first quarter of this year, following a boiler accident, which halted production at the company’s Bell Road facilities.
Pre-tax profit for the three months ending March 31 stood at $87.4 million, up from $71.4 million in the comparative period.
Salada also saw an increase of 15 per cent in its administrative expenses as a result of staff related costs during the three months ending March 2019.
Selling and promotional expenses, on the other hand, were curtailed, with the company cutting spend in that area by close to 15 per cent.
Profitability has, however, been adversely affected as the full impact of the cess on imported green beans used in the manufacturing of instant coffee is now realized, according to Salada.
“The cess came into effect April 2018 and would not have impacted our prior year's results,” the company said.
Consequently, cost of sales increased by 27 per cent during the quarter under review, moving from $147.7 million in the corresponding period 2018 to $188.5 million in the second quarter of 2019.
As of March this year, a total of 22,535.25 boxes of coffee cherries were acquired since the launch of Salada’s initiative in November 2018 to purchase local coffee and assist the local coffee industry.
The company has spent $179 million on the project to include cherry acquisition and further processing green beans.
“Conditions are favourable for sale of the higher grades of beans acquired and the other grades will be used in both our instant coffee manufacturing process and our roasted and ground lines,” Salada said in its accompanying financial statements.