Consolidated Bakeries Continues to Report Net Losses

• For the year ended December 2020, Consolidated Bakeries (Purity) reported a net loss of -$14.42Mn, a deterioration from the net loss of -$12.49Mn reported for the same period in 2019.
• The higher losses reflect a 3.2% (or $33.29Mn) reduction in revenues and a 5.6% (or $11.53Mn) rise in admin expenses. The company’s revenues were impacted by the government-imposed restrictions to stem the spread of the virus such as school closures, and the fall in employment which impacted consumers’ purchasing power.
• However the falloff in the revenues and rise in indirect expenses were largely tempered by a 6.3% (or $40.48Mn) drop in the cost of sales, which was fueled by reductions in salaries and related expenses, purchases, repairs, and maintenance and transportation costs.
• Purity was reporting a net loss before the onset of the pandemic. Therefore, although the company should realize a gradual improvement in its revenues as further inoculation of citizens and containment of the virus influence a relaxation of restrictions especially the re-opening of schools, and greater tourism activity, without implementation of cost reduction strategies, the company is unlikely to return to a positive outturn in the near term.
• Following an 18.7% decline during 2020 to $1.35, the company’s stock price has risen by 25.9% since the start of 2021, closing Wednesday’s trading session at $1.70.

(Source: Consolidated Bakeries Financial Statements)