Seprod Delivers Q3 Earnings “Serge”; 9M Flat

  • Driven by robust topline performance, Seprod Limited (SEPROD’s) earnings surged by 95.3% for the quarter ended September 30, 2025 (Q3 2025).
  • Revenue came in at J$37.87Bn, up 7.9% year-over-year (YoY), reflecting growth across the major business segments for the regional manufacturer and distributor. The company benefited from a J$1.24Bn gain on investment property and improved performance in the dairy manufacturing operations. Notably, the dairy operations benefited from $700Mn investment in increased packaging and processing capacity, which is expected to increase production output and productivity, going forward.
  • Direct costs grew faster, up 10.5% to J$27.96Bn. Consequently, while there was a 1.2% uptick in gross profits to $9.91Bn, gross margins decreased to 26.2% from 27.9%.
  • The group also had a 161.6% increase in other income to $$1.44Bn, and continued easing of operating expenses (opex), which resulted in an improvement in operating income (+27.5%). Notably, opex growth is cooling relative to the first two quarters of the financial year. The slowdown reflects Seprod’s ongoing strategy to capture synergies from recent acquisitions and strengthen cost management strategies across the Group. Consequently, Q3 operating margins improved from 6.8% to 8.0% for the YoY.
  • Meanwhile, Q3 finance costs grew (+9.6%), due to higher debt associated with strategic investments and expansion. Notably, Seprod’s subsidiary, ASBH, increased its stake in Caribbean Producers (Jamaica) Limited (CPJ) from 45% to 75% effective December 31, 2024. This involved a share swap, not borrowing, but its debt and finance costs were ultimately consolidated in Seprod’s financials.
  • Nonetheless, Q3 2025 net profit jumped to J$1.62Bn compared to J$653.8Mn in Q3 2024, and net profit margins increased to 4.3% from 2.4%. However, despite the solid quarterly performance, for the nine months ended September 30, 2025 (9M 2025), net profit saw a marginal increase of 2.8%. The outturn reflects elevated operating and finance expenses in both the first and second quarters, despite Seprod's robust Q3 earnings.
  • Looking ahead, the impact of Hurricane Melissa on Seprod’s operations is expected to be mixed, reflecting the broad diversity of the Group.  In the near term, the company’s strategy includes shifting a portion of its distribution efforts toward the retail trade, particularly within business segments that have traditionally been concentrated among large customers in the tourism and hospitality sectors. The company also noted that it will continue to pursue enhancements in cost efficiency as part of its ongoing efforts to strengthen profitability.
  • Seprod’s stock price has declined by 6.7% year-to-date, closing at $81.34 as at Tuesday, November 25, 2025. At this price, the stock trades at a price-to-earnings (P/E) ratio of 23.3x, which is higher than the Main Market Distribution and Manufacturing Sector’s average of 17.3x.

(Sources: Seprod Financial Release & NCBCM Research)