Cigarette distributor Carreras Limited grew sales during the second quarter by eight per cent to $3.46 billion as the economy reopened and the company’s distribution channels became more fluid due to the novel coronavirus restrictions.
Following the 22 per cent drop in the first quarter resulting from the impact of the novel coronavirus panndemic on movement and the economy, Carreras adapted to the environment which saw increased consumption in the country. Even with cost of sales increasing by $151 million, gross operating profit remained eight per cent higher at $1.7 billion.
“Our confidence that Jamaica will emerge stronger from this unprecedented crisis gathers steam daily…”– Managing director of Carreras, Raoul Glynn
Lower expenses combined with greater gross operating profit left Carreras with a 12 per cent increase in operating profit which stood at $1.21 billion. Despite finance income falling by 87 per cent and taxes being higher for the quarter, Carreras’s net profit rose by 11 per cent to $910.6 million which resulted in earnings per share of 18.76 cents. However, the impact from the first quarter’s reduction still saw the overall six months net profit remaining 11 per cent below the prior period at $1.56 billion.
Even with the impact of the pandemic, Carreras has remained focused on paying dividends to shareholders with the payment of $0.32 ($1.55 billion) being the same as last year and representing a near 100 per cent dividend pay-out ratio on net profits. Because of this stable recovery in sales, Carreras declared a dividend of $0.17 ($825.2 million), which will be payable on December 16 to shareholders on record as of November 23. Total assets stand 12 per cent higher at $4.29 billion, while shareholders equity stands 17 per cent higher at $1.78 billion.
“We are driven by the passion of our team, and our strong working relationship with the 10,000 valid outlets that sell our products across the island. Our confidence that Jamaica will emerge stronger from this unprecedented crisis gathers steam daily, and therefore Carreras remains optimistic in our outlook for the business,” managing director of Carreras Raoul Glynn stated in his report to shareholders.
— David Rose