Sales rise at Seprod, but profit down
Published:Friday | August 16, 2013 | 12:00 AM
Seprod Limited has reported a fall in quarterly profit despite increased revenues linked to price increases as well as an uptick in sales.
The company, which distributes brands such as Serge, Miracle, Butterkist and Swizzle, saw revenues of J$3.6 billion for the quarter ending June 30, an increase of 14 per cent over a revenue margin of J$3.1 billion for the comparative period for 2012.
Second-quarter profit dropped by close to J$38 million to J$632 million.
"Our profits would have been affected by the movement in the dollar, as well as by contractual obligations such as salary increases that were due," company chief financial officer Angela Cooper told the Financial Gleaner.
Electricity costs also took a bite of the profits, Cooper said. However, with plans afoot to develop at least a 30-megawatt plant at its Golden Grove Sugar Factory location, it is expected that this, coupled with other cost-saving measures, will reduce operational expenses and increase gross profits.
Seprod also instituted several trade deals among its distributors to combat what it described as "stiff market competition," the result of which, the CFO said, led to increased revenues.
"Some of our profit centres also had to reduce prices to stay afloat," Cooper said, noting the double effect of achieving increased revenues through increased sales from marked-down items.
Net profit at half-year was just over J$1.4 billion.
External sales from the company's manufacturing segment stood at J$4.7 billion with its distribution segment trailing at J$2.4 billion.
Assets for the manufacturing segment closed the period at J$7.9 billion, over the J$6.5 billion realised in the comparative period of 2012.
With the core of its external market centred in the Caribbean, Seprod, which also exports to the UK, US and Canada, is counting on extending its reach into African markets to bolster its financial position.
"We have identified possible customers in the region, but legal concerns for marketing in these markets means that much due process is needed," Cooper said.
While declining to state which products the company will introduce to the African continent, Cooper was bullish on the prospects for the company's growth plan.