Salada profits dip

Salada Foods Jamaica Limited has reported a 25 per cent drop in net profit at the end of its first quarter, resulting it said, from increased production, selling and administrative expenses for the period.

At the end of December 2010 net profit of the coffee-processing company amounted to $16 million, down from $21.5 million for the similar period in the previous year.

And although an increase of approximately 7 per cent was recorded in turnover, moving it to $110.8 million at the end of the reporting period, that was not enough to stop the company's bottom line from haemorrhage as expenses moved up.

Selling and promotional costs totalled $6.7 million, an increase of 24 per cent, moving from $5.4 million for the corresponding quarter in 2009.

Similarly, administrative expense rose by 12.4 per cent to $17.2 million for the reporting period.

These increases were further compounded by a massive fall in the company's interest income, although not surprising in an environment of declining interest rate.

Interest income for the period was $6.2 million, a 43 per cent decline when compared to the $10.9 million recorded for the same quarter in the previous year.

But despite less than strong performance, management remains optimistic about the future.

"We are very upbeat ... hopefully things will pick up as we are seeing signs of a turnaround," said John Rosen, managing director.

In an effort to diversify, Rosen also hinted at the company's annual general meeting that they would be putting in a bid for the purchase of the Government of Jamaica's 70 per cent interest in the Mavis Bank Coffee Factory.

So far, the company has added a business development manager, Julian Rodney, to its management team to stir strategic acquisitions, a move intended to focus the company in rebounding from the economic downturn, its says.

Other areas for growth going forward will include development of new products, and export expansion.

The size of the export market that Salada commands was not immediately known.

But it now exports to the United States of America, United Kingdom, China, Grand Cayman, Barbados, as well as other Caribbean countries.

On the balance sheet, Salada has total asset of $552.8 million, while cash and cash equivalent showed a slight increase to $291 million, up from $273 million at the end of the company's first quarter ended December 2010.

The stock last traded at $12.50 on the Jamaica stock market.