Fontana Earnings Outpace Retail Sector Growth | Company
Fontana Limited pharmacy and retail profits increased 18% to $606.2 million at the end of the year in June 2022, compared to net profit of $512.3 million realized last year. last year, helped by sales which increased by 23%, exceeding the growth recorded for the whole retail and wholesale sector during the last four quarters.
The increase in revenue and profit has been achieved even without the business opening its planned new location in the sprawling Portmore dormitory community in St Catherine, which is due to come into operation early next year. Fontana’s sales reached $6.34 billion for its June fiscal year-end, up from $5.1 billion a year ago.
“We outperformed the general economy before, during and after COVID-19,” said Anne Chang, CEO of Fontana. financial gleaneremphasizing that the positive result was the continuation of a trend.
The wholesale and retail trade sector grew by 8.8% in the quarter of March 2022, by 10.6% in the quarter ending in December 2021, by 4.4% in the three months ending ending in September last year and 19.3% in the previous three months to June. 2021, according to data from the Statistical Institute of Jamaica.
Chang expects Fontana’s favorable performance to continue in 2023 despite local and international recession concerns.
The profit for 2022 doubled the profit of $306 million for the year 2019.
Chang said Fontana continues to see strong revenue growth in key areas thanks to increased demand and high inventory levels. The company achieved more than 70% more sales in its 2022 fiscal year, compared to the $3.7 billion it made before the pandemic. The growth trajectory continues as Q4 2022 sales are now more than 85% higher than Q4 2019.
The company reportedly provided “careful inventory management” to combat pandemic-induced logistics and global supply chain challenges in procurement.
During the year, operating expenses increased by 15%, due to increased operating hours and increased staffing costs, as Fontana said it was looking to reduce migration personnel and to mitigate energy price increases due to the war in Ukraine.
Personnel costs increased by $100 million in one year when Fontana also increased its workforce from 402 to 413. Cost of sales jumped some $800 million, from $3.2 billion to $4 billion of dollars. Financial expense also increased from $167.2 million in 2021 to $217 million at the end of fiscal 2022.
“Global supply chain challenges resulting in higher than normal distribution, shipping and freight charges continued to impact the cost of goods,” Chang said in remarks accompanying statements. recently released financials.
During the year, cash flow improved by 75% to almost $1.5 billion thanks to operations, short-term investments and fundraising.
“This was bolstered by proceeds from our December 2021 bond issuance for capital expenditure and expansion,” the CEO added in the financials.
The company raised some $500 million in a bond offering earlier this year. The funds are expected to be applied to growth projects including the opening of its seventh store in Portmore. Fontana now operates two stores in Kingston – in Barbican and Waterloo Road, and one location each in Savanna-la-Mar in Westmoreland, Ocho Rios in St Ann, Mandeville in Manchester and Montego Bay in St James.
The company’s total assets rose to $4.5 billion from $3.5 billion a year earlier. Half of its assets are made up of cash and inventory. Equity reached $2.16 billion, up 19.7% year-over-year, helping Fontana pay two dividends totaling $250 million during the year, the company said.