A Bitter Brew in Q3 for Salada

• For the quarter ending June 30, 2025 (Q3 2025), Salada Foods Jamaica Limited (SALF) reported earnings of $31.01Mn, marking a 51.1% year-over-year decline, as a blend of dwindling revenues and rising operating expenses brewed significant pressure on the company’s bottom line.
• Revenues for the quarter declined by 5.8% to $381.93Mn, largely driven by a decline in sales in the domestic market.
• Cost of sales declined by 0.8% during the quarter; however, the gains was partially offset by elevated input costs, particularly for raw materials and packaging. Combined with a suboptimal price adjustment, these pressures contributed to a 356bps compression in gross margin.
• Operating expenses rose 9.9% in the quarter, reflecting increased strategic investment in organisational capacity, alongside the impact of a non-recurring administrative expense.
• The quarter’s performance poured cold coffee over an already stale blend from the six months ended March 2025, brewing a bitter year-to-date result, with earnings declining by 26.1%, to $119.82Mn for the nine months ended June 2025.
• SALF’s stock price has decreased by 24.6% since the start of the calendar year. The stock closed Wednesday’s trading session at $2.91 and currently trades at a P/E of 20.8x above the Main Market Manufacturing & Distribution Sector Average of 13.0x.

(Sources: JSE and NCBCM Research)