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Caribbean Producers Jamaica sales plummet from virus-hit tourism industry

Caribbean Producers Jamaica (CPJ) Limited said aggressive measures over the past six months have reduced the impact of COVID-19 on the company.

CPJ said its group sales dropped 79 per cent in the quarter as the hotel industry shuttered due to the onset of the coronavirus pandemic.

Management indicates that for the fiscal year ended June 30, “aggressive debtors management” coupled with inventory containment resulted in decrease in current assets by US$12.82M and accordingly total assets also decreased by US$14.91M.

It adds, “Prudent creditors and cash flow management resulted in decrease in total liabilities by US$10.02M over the last fiscal year.

The lower than usual business activity due to the ongoing pandemic also contributed to reduction in total assets and total liabilities, it said in the report to shareholders.

“With the easing of the travel restrictions and bans beginning June 2020, CPJ Group has seen some increased demand for products and services…”

– CPJ management

CPJ Group recorded strong sales of US$59.47M and profitability of US$0.62M (post IFRS-16 adjustments) over the review period.

The report states the company was on track to deliver a robust financial performance for the fiscal year but the onset of COVID-19 saw an unexpected shutdown of hotels both onshore and offshore.

CPJ Group, the largest supplier of food and beverage in the hospitality sector, was severely impacted by the global pandemic.

Group sales plummeted from the month of March 2020 and continued to be adversely affected until the end of the fiscal year June 2020, impacting Q3 and Q4 sales and profitability in its usually most profitable trading period.

As a result, Group sales in Q4 were US$5.78M, down 79 per cent compared to corresponding period in 2019.

Group sales for the entire fiscal year were US$91.70M, down 16 per cent compared to the last fiscal year 2019 and 26 per cent than expected revenue.

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

Management noted that COVID-19 official travel bans, and restrictions continue to disrupt global economic activity on an otherwise booming travel and tourism sector.

They stated, “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.”

Management said they are optimistic that “a solution to the virus will be available soon and restore confidence in travel in the usual busy tourist season from December 2020 to March 2021 and beyond.”