Lathered in Costs, BPOW’s Earnings Slip Away in Q1

• Blue Power Group Limited (BPOW) opened its 2025 financial year on a weaker footing, posting a steep 41.4% decline in earnings to J$28.42Mn for the three months ended July 31, 2025 (Q1 FY2025). Higher indirect costs and, to a lesser extent, softer revenues were the primary drivers of the falloff in profits.
• Revenues were broadly flat (-0.9%) at J$231.70Mn (down 0.9% YoY) compared to J$233.88Mn in Q1 FY2024. The sales mix continued to tilt towards value-priced bath and laundry soaps, constraining topline growth.
• Cost pressures intensified with direct costs rising by 11.1% YoY to J$153.83Mn, cutting gross profit by 18.4% YoY to J$77.87Mn. There was an accompanying compression in the gross profit margin to 33.6% from 40.8% in Q1 FY2024. Higher raw material costs, amplified by 40.0% CET on essential imports under CARICOM trade rules, helped to compress gross margins.
• Operating expenses surged, exacerbating the impact of higher production costs. Administrative and other costs increased by 30.5% YoY to J$68.30Mn, further eroding profitability. This outweighed gains from other income (J$5.09Mn vs J$2.93Mn) and limited impairment charges, resulting in operating profit plunging 65.5% YoY to J$15.73Mn.
• That said, non-operating items offered some cushion. Finance income jumped 50.8% to J$12.32Mn, while the share of profit from its associate Lumber Depot Limited contributed J$6.24Mn (down from J$7.44Mn). However, after taxation of J$5.32Mn (vs J$11.49Mn), net profit landed at J$28.42Mn, well below the prior year’s outturn.
• Management remains optimistic, noting that Blue Power continues to lead the local bar soap market and is pushing into premium bath soaps with skincare and beauty features as part of its product innovation strategy.
• BPOW’s stock price has declined by 16.9% year-to-date, closing at $3.98 as at Thursday. At this price, the stock is trading at a P/E ratio of 19.9x, which is above the Junior Market Manufacturing Sector average of 20.99x.

(Sources: Blue Power Group Ltd. Financial Statements & NCBCM Research)