Revenues Grow at Kremi, but Profit Melts  


  • Caribbean Cream Limited (Kremi) Limited recorded a net profit of $2.4Mn for the third quarter that ended November 30, 2022. This represents a turnaround in profitability relative to the $25.15Mn loss of the corresponding period of 2021. However, the company’s bottom line for the nine months declined by 69.9% to $10.93Mn when compared to the same period in 2021, given a 96.6% growth in finance costs. This is likely a result of the acquisition of the cone manufacturing company, Koni Kone, for $45Mn in 2021.
  • Gross operating revenue for the quarter was up by 15% Y-o-Y to $575.59Mn, while the nine-month revenue was $1.83Bn and represents a 19.4% jump. The increase in the Y-o-Y cost of goods sold; however, outweighed the growth in revenues resulting in a falloff in gross profit margin from 32% to 29% for the nine months.
  • Administrative, selling and distribution expenses were 11.7% higher in the nine months ending November 2022 compared to the $425.00Mn recorded in the same period of last year. This was largely due to higher costs associated with utilities, security and repairs, and maintenance.
  • Kremi’s stock price has decreased by 1.6% since the start of the calendar year. The stock closed Wednesday’s trading session at $3.80 and currently trades at a P/B of 1.78x, below the Junior Market Manufacturing Sector Average of 3.08x.
  • The outlook for Kremi is positive as it continues to invest in its capital base with work on its CHP plant which will see the company becoming self-sufficient in energy. Moreover, the construction of its new cold room and blast room will increase its capacity to store frozen novelties and reduce bottlenecks in the production flow.

(Sources: JSE and NCBCM Research)