Salada reaping from efficiencies and market moves

Salada Foods Jamaica Ltd reported an improvement in third-quarter earnings, benefiting from stronger sales, wider margins, and the payoff from efficiency measures.

The coffee and beverage manufacturer reported net profit of $68.3 million for the three months ended June 30, more than double the $31 million earned in the corresponding quarter of 2025, representing a 120 per cent increase. Revenue climbed 16.1 per cent to $443.4 million from $381.9 million a year earlier as the company continued to expand its presence in domestic and export markets.

General Manager Tamii Brown said better distribution is playing into the numbers.

“We’re seeing the benefits of our efforts in the USA and the Caribbean. In the United States, we’re growing through some of the main supermarket chains in the South and through Amazon. In the Caribbean, we’re seeing growth primarily in Barbados. Our mainstay coffee line continues to grow in both the domestic and export markets,” Brown told the Financial Gleaner.

Noting that distribution is only half the story, Brown said innovation across the Jamaica Mountain Peak portfolio also drove growth. She noted that since launching Sorrel Hibiscus in October 2025, at the start of the fiscal year, Salada has recorded month-on-month growth in both the domestic and export markets.

“Our Sorrel Hibiscus also continues to grow, even outside the traditional festive period – consumers are now enjoying it right throughout the year. They’ve welcomed it with open arms, and it’s driving revenue as a result,” she reported.

The gains came off a soft base. The prior-year June quarter was burdened by one-off redundancy costs and a 5.8 per cent decline in domestic sales, which depressed earnings by more than half, according to analyst reports at the time.

Gross profit rose 29.7 per cent to $146.2 million from $112.7 million in the prior-year quarter, outpacing revenue growth and driving a notable improvement in profitability. Gross margin widened to 33 per cent from 29.5 per cent, a gain of 3.5 percentage points, reflecting stronger pricing, improved cost management and a more favourable sales mix.

The margin expansion flowed directly to the bottom line. Operating profit surged 148.6 per cent to $87.4 million, compared with $35.1 million in the June 2025 quarter. Profit before tax more than doubled to $91 million from $41.3 million.

A key driver of the stronger operating performance was tighter control of overhead expenses. Administrative expenses fell by 29.1 per cent to $41.7 million from $58.9 million, while selling and promotional expenses declined 8.6 per cent to $17.5 million from $19.2 million despite the higher revenue base. Selling and promotional expenses fell to 5.0 per cent of revenue from 5.2 per cent a year earlier, while administrative expenses dropped to 10.1 per cent of revenue from 12.9 per cent.

The third-quarter earnings translated into earnings per stock unit of $0.07, up from $0.03 in the corresponding quarter last year.

While the quarter’s earnings performance stood out, the company’s cash generation also strengthened. For the nine months ended June 30, net cash provided by operating activities totalled $148.2 million, a significant turnaround from the $57.1-million operating cash outflow recorded in the corresponding period last year. The company declared an interim dividend of $0.069 per stock unit, payable June 30 to shareholders on record as at June 8.

Cash and cash equivalents closed the period at $157.4 million, more than double the $68.9 million held a year earlier. Total assets stood at approximately $1.58 billion.

For the nine-month period, Salada recorded revenue of $1.28 billion, up 11.5 per cent, while net profit increased 40.6 per cent to $168.5 million. However, the June quarter accounted for a significant portion of those gains, underscoring the extent to which the company’s efficiency programme and market expansion efforts are now contributing to earnings growth.

neville.graham@gleanerjm.com