Kremi sum­mer ice cream sales jump, but earn­ings f lat

Jamaica Gleaner - - IMF TRACKER - Steven.jackson@glean­

CARIBBEAN CREAM Lim­ited, which trades as Kremi, re­ported a mod­est uptick in net earn­ings for the Au­gust sec­ond-quar­ter and dou­ble-digit growth in sales.

The ice cream com­pany made $46.4 mil­lion net profit on rev­enues of $300 mil­lion over three months, or two per cent higher net profit year on year.

Rev­enue grew 11 per cent as a re­sult of con­tin­ued mar­ket­ing and sales within in the whole­sale/ re­tail seg­ments; and also the ho­tels, restau­rants and in­sti­tu­tions seg­ments of the market, “where we con­tin­ued to make in­roads into our com­peti­tors’ market share, and the con­sumers con­tinue to show their brand loy­alty to the Kremi brand,” said direc­tors Chair­man Carol Clarke Web­ster and CEO Christo­pher Clarke in a state­ment ac­com­pa­ny­ing the fi­nan­cial re­port.

The mod­est rise in profit re­sulted from a 17 per cent spike in ex­penses to $70.8 mil­lion.

“The key driv­ers be­hind these num­bers are salary ad­just­ments and con­tin­ued in­vest­ment in key per­son­nel as the busi­ness grows,” stated man­age­ment. “An ag­gres­sive tech­ni­cal sup­port train­ing pro­gramme for all lev­els of com­pany per­son­nel. This sup­ports our drive for greater ef­fi­ciency and HACCP and 5s cer­ti­fi­ca­tion.”

Kremi does not have an ex­port plan. HACCP cer­ti­fi­ca­tion, how­ever, would al­low en­try into the United States for its prod­ucts if it deems that market vi­able to ex­plore. The 5s cer­ti­fi­ca­tion deals with or­gan­i­sa­tional prac­tices de­vel­oped from five Ja­panese con­cepts aimed at im­prov­ing work flow.

Kremi’s earn­ing per share for the quar­ter re­mained flat at 12 cents when com­pared with a year ago.


Over six months, earn­ing per share tripled from 10 cents to 30 cents. The stock has traded as high as $10 this month in a ju­nior market that trades at roughly 15 times earn­ings. It last traded at $9.25 per share.

Last month, Kremi an­nounced plans to in­vest $200 mil­lion to im­prove oper­a­tions and dress up ex­panded space in its Kingston plant. Ini­tially, the com­pany will in­stall a waste­water plant by next year at a cost of $30 mil­lion. This will treat and pump waste wa­ter ef­fi­ciently in or­der to de­crease op­er­a­tional costs.

Sec­ond, the com­pany plans to com­plete the ex­pan­sion of its pro­duc­tion space, add san­i­tary floor­ing and wall cov­er­ing, in­su­la­tion, AC units, which it is in­creas­ing by 50 per cent cost­ing some $170 mil­lion.

The planned project ex­pen­di­tures amount to four times the $47 mil­lion capex recorded by Kremi for its last fi­nan­cial year end­ing Fe­bru­ary 2016.

Since list­ing on the Ja­maica Stock Ex­change in 2013, the com­pany has in­vested in equip­ment, blast freez­ers and rack shelves in or­der to ac­com­mo­date its in­creased pro­duc­tion.

Kremi is a man­u­fac­turer and dis­trib­u­tor of bulk ice cream prod­ucts. It pro­duces 20 flavours of Kremi ice cream in three­gal­lon, 1.5-gal­lon and quart sizes, as well as three flavours of ice cream cake nov­el­ties. It also dis­trib­utes the Fla­vorite brand of frozen nov­el­ties from Trinidad.

The com­pany, which re­port­edly com­mands a 50 per cent share of the bulk dis­tri­bu­tion market, cur­rently owns and op­er­ates three de­pots lo­cated between Montego Bay and Kingston.

Kremi’s re­tail prod­ucts are dis­trib­uted by Wisynco Group.

Christo­pher Clarke, CEO of Kremi/Caribbean Cream Lim­ited.

Newspapers in English

Newspapers from Jamaica

© PressReader. All rights reserved.