EFresh posts loss after meat business consolidation
Higher operating expenses pushed food distributor Everything Fresh Limited into the red in the June quarter, as the importer and distributor integrated the recently acquired Meat Experts into its operation.
Everything Fresh revenue improved by five per cent to $520.5 million, compared to $494 million in the 2018 period, but it was not enough to offset the impact of the added costs, which more than doubled to $80 million.
The result was a loss of $28.8 million for the company in the second quarter.
Everything Fresh faced one-off costs associated with the meat division, and a dip in sales due to the temporary closure of a major client’s operation.
“Sales of the traditional business dipped by 7 per cent versus the prior year as one of our major hospitality industry relationships closed for a major refurbishing exercise and will reopen early in the fourth quarter of this financial year,” said Managing Director Courtney Pullen in a statement accompanying the company’s quarterly results.
Meat Experts administrative expenses stood at approximately $28.6 million for the quarter, while cost of sales as at the half year totalled $159.5 million for the division, to include one-off charges in the second quarter of $7.3 million.
The heightened expenses also resulted in Everything Fresh posting a loss of $28 million for its half year, which was mainly attributable to a loss of $57.7 million in the meats division. Sales in the period grew from $968 million to $1.11 billion. The company also suffered from lower margins due to costs related to its new wholesale business and increases in electricity charges, foreign exchange losses and administrative expenses.
The company’s cash was also depleted from $213.6 million to $7.8 million.
Operating from 78 Marcus Garvey Drive in Kingston, Everything Fresh imports and distributes dairy, meats, assorted dry and canned goods, fruits and vegetables, seafood and meats locally. The company is a major supplier to hotel brands, including Secrets, Iberostar, Bahia, Couples, Jewels, Royalton, and Fiesta, as well as supermarkets and retail outlets.
In February, the 16-year-old distribution company announced that it had pumped $50 million into the acquisition of St Catherine-based abattoir, Meat Experts Limited, marking its entry into manufacturing. The acquisition not only adds several new products to Everything Fresh’s portfolio, but is also expected to reduce costs for the company over time while expanding its partnerships with local livestock and produce farmers.
Meat Experts has its own abattoir, cutting, processing, packaging and cold storage facilities and logistics network in Bog Walk. The plant is currently operating at approximately 30 per cent capacity but Pullen expects to continue growing sales to improve the utilisation of the factory while absorbing the associated overhead costs of the plant.