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Trafco’s net profit rises to BD1.35m

Bahrain Business
Tue, 07 Nov 2017
Avinash Saxena
1 of 2

In a statement, the company said the rise in profit was despite a three per cent decline in total sales from BD31m last year to BD30m this year.

The general price drop in major commodities and a revision in policy of imports in certain branches to boost profitability were major reasons for the decline, said chairman Ebrahim Zainal.

For the third quarter, net profit saw a 37pc decline from BD342,000 last year to BD216,000 this year.

A drop in return on investment portfolio and losses in a sister company were the major reasons for the decline, it said.

Total sales in the third quarter stood at BD9.9m, lower by 2pc when compared with BD10.1m for the same period last year.

The group’s chief executive S Sridhar said the decline in total sales during the period was partially due to general international price decline in food items like frozen chicken that the group deals in.

A change in the policy of fresh fruit and vegetable imports by the group’s branch at Manama Central Market resulted in volume decline and this policy was adopted to concentrate more on items with better margin.

On the whole, the total decline in sales value was nominal as some other subsidiaries did better which reflected positively on the consolidated figures.

Awal Dairy, a subsidiary in which the Trafco Group owns 51pc stake, achieved the highest total sales in third quarter when compared with sales in the last five years.

The company has received official commercial licence to operate a branch in the Eastern Province of Saudi Arabia, which is expected to be fully operational by early next year.

Bahrain Livestock (BLSC), a sister company, continued to post losses for the third quarter mainly because of a general change in the meat trade to chilled and frozen meat, and tough competition from new operators.

BLSC has started operating on a value added unit to cater special cuts of meat to catering institutions, restaurants and major hotels.

Some contracts have been signed, and BLSC is now also managing meat sales counters of a local supermarket, and planning to expand in this area with new contracts.

A wholly owned subsidiary, Bahrain Water Bottling, reported a profitable third quarter having exported some quantities of its Marwa branded bottled water to Kuwait.

The company is also working on third-party bottling of water for private brands and the management is looking for more avenues to serve the local institutions.

Trafco Logistics, another wholly owned subsidiary, saw increased demand for storage and other logistics services, maintaining its share of the market and built up on profitability.

However, Bahrain Fresh Fruits Company, yet another wholly owned subsidiary, continued to book losses in spite of efforts from management to diversify in new areas of imports that could be more profitable.

Metro Markets, the retail subsidiary of the group, which operates six outlets, maintained its sales volume and profitability in line with previous year.

The investment portfolio of the group has contributed a total profit of BD671,000 for the nine-month period of this year against BD622,000 during the same period last year – an increase of 8pc.

The return from investment portfolio for the third quarter alone was BD61,000 against BD157,000 last year.

The results were approved by the company’s board of directors yesterday.

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