FOR the first half of the year that ended on June 30, 2021, Sterling Products Limited (SPL) recorded an after-tax profit of $56.9 million, which is a significant decline in performance from what obtained last year.

According to the institution’s audited financial statements, which were published on Wednesday, the recorded profit represents a decrease of $3 million, since the company recorded a $59.9 million profit for the same period last year.

The company has attributed its poor performance on the marketplace to “an increase in cost of production” which, in turn, affected its “gross profit margin considerably”. The company recorded a total of $81.5 million in before-tax profit, as against the $85.7 million it raked in for the same period in 2020. This translates to a five per cent dip, when compared to the corresponding period last year.

In his report, Company Chairman Andrew M.F Pollard, S.C., said the decline was due to the increase in production cost the company faced during the year.

“During the first half of the year, we have seen an increase in cost of production, which affects our gross profit margin considerably. This increase was due to the escalating freight cost on the global market, which increase the landed cost for key raw and packaging materials,” Pollard was quoted as saying.

He noted that the expenses for the first half of the period were $501.3M, an increase of $26.6M over the corresponding period last year. This increase, it was explained, was owing to an increase in employment costs, marketing and distribution expenses, as well as depreciation and maintenance expenses.

Meanwhile, the company has recorded a $143.7 million “turnover” or net sales, which reflects an 8.4% increase over the corresponding period 2020.

As such, Pollard indicated that the company plans to employ strategies to reduce its operation costs. “The Board of Directors and Management,” he said, “are actively pursuing consolidation of the company’s current business and development of new product lines in addition to employing strategies to reduce our cost of operations and cut costs wherever possible in order to deliver acceptable returns to you.”