Caribbean Flavours and Fragrances is pushing to grow its export market, particularly in the Caribbean, to buffer the COVID-19 impact on its local operations, whilst diversifying its product line.
The junior market listed company, which provides flavours and fragrances of the highest quality to the major beverage manufacturers in Jamaica, is also exploring opportunities within the region. At present Caribbean Flavours and Fragrances exports flavours and fragrances to the Caribbean and Canada and is pushing to grow exports even further.
The company also provides fragrances to local manufacturers of household and personal care products having now diversified to produce its own brand of hand sanitisers. While not giving much details about its regional push, Managing Director Derrick Cotterell emphasised that while the many negative effects of the pandemic remains to be seen, the management team is confident that the company will be able to overcome the unforeseen hurdles posed by COVID-19.
2020 BEST FINANCIAL YEAR SINCE BEING LISTED ON THE JUNIOR MARKET
In his 2020 report to shareholders, Cotterell highlighted that, “despite the many challenges faced in the market, the company outperformed expectations and produced its best financial results since listing on the junior market of the Jamaica Stock Exchange in 2013.” The company generated revenues of $593.7 million in 2020, which is 29 per cent above the 2019 performance.
Gross profit and net profit before taxes improved significantly with net profit before taxes jumping by 163 per cent to end the year at $96.5 million over the $36.8 million recorded in 2019. For the fourth quarter in December, net profit amounted $24.22 million versus a loss of $16.16 million for the comparable period December 2019.
Profit from operations for closed 2020 at $72.31 million, up from the 2019 posting of $28.10 million. As for the fourth quarter, operating profit closed the period at $17.44 million, versus a loss of $19.12 million in 2019.
Finance income for the year amounted to $24.21 million, up from the $8.71 million posted in 2019. As such, pre-tax profit amounted to $96.51 million, more than doubling the 2019 amount of $36.81 million.
After incurring taxes of $14.21 million compared with $5.31 million in 2019, net profit for 2020 amounted to $82.30. Cost of sales amounted to $403.17 million compared to 2019 when the amount was $323.30 million, thus resulting in a gross profit of $190.58 million compared to the 2019 out-turn of $139.16 million.
TOTAL EXPENSES INCHING UP
Caribbean Flavours and Fragrances recorded a year over year increase in total expenses to $121.13 million, which is up nine per cent from $111.06 million booked in 2019. Total expenses comprised of selling and distribution cost which totalled $6.20 million coming from $3.40 million in 2019, whereas administrative expenses closed at $114.94 million coming from $107.66 million in 2019.
Total expenses during the quarter amounted to $32.13 million, four per cent down from $33.54 million booked for 2019 fourth quarter. Caribbean Flavours and Fragrances, as at December 31, 2020, recorded total assets of $635.02 million, an increase of 13 per cent when compared to $563.22 million for the prior year.
Cash and Cash Equivalent largely contributed to this growth, closing the period at $295.43 million coming from $225.65 million in 2019. In concluding the Caribbean Flavours and Fragrances managing director remarked, “despite the impact of COVID 19 pandemic, the 2020 financial results demonstrates the management’s ability to make strategic decisions and implement strategies geared towards growth and continuous support of the customers we serve.”