Honey Bun Ltd delivered higher first-quarter sales to December, but its $13-million profit marked an 83 per cent dip from year-earlier levels.
Costs rose with the commissioning and early ramp up of its Angels, St Catherine facility, while Hurricane Melissa disrupted trading days and customer demand. For the three months ended December 31, 2025, gross operating revenue rose 7.0 per cent to $1.11 billion.
“The reduction in profitability was primarily attributable to elevated operating costs associated with the commissioning and early stage ramp up of the company’s new production facility in Angels, St. Catherine and revenue disruption resulting from Hurricane Melissa,” CEO Daniel Chong said in the preface to the financials. Chong became CEO on October 1, succeeding Michelle Chong, who remains a director and continues to lead the Honey Bun Foundation.
Despite the profit squeeze, demand indicators were encouraging. Export revenue jumped 57.3 per cent year-over-year, underscoring progress on the company’s regional push even as domestic trade faced weather-related interruptions. Gross profit climbed to $522.4 million, with a margin of 47.1 per cent versus 48.0 per cent a year earlier, reflecting modest input cost pressure.
Operating expenses reflected investment ahead of growth. Administrative, selling and distribution costs surged 22 per cent to $477.9 million, compressing operating profit to $44.6 million from $108.1 million. Finance costs widened to $26.2 million from $7.7 million, consistent with heavier lease charges and incremental debt tied to expansion.
Hurricane Melissa forced Honey Bun to suspend operations for five business days and weighed on customer activity in affected areas. Management estimates the storm shaved about $105 million from first-quarter revenue. “Wholesale outlets also avoided physical damage; however, interruptions to staffing, electricity, and communication services significantly affected operations for up to a few weeks in some areas,” the company said.
The Angels facility was commissioned on September 6, 2025. “While the facility is currently operating below optimal capacity, as production scales it is expected to generate progressively higher revenues and improved efficiencies over time,” Chong noted.
The capital programme is visible on the balance sheet: property, plant and equipment stood at $1.55 billion at quarter end versus $796.6 million a year earlier, while total assets rose 12 per cent to $3.0 billion. Long-term borrowings increased by $419.6 million year-over-year to support the buildout.
Cash and equivalents closed the quarter at $230.7 million, down 19 per cent year-on-year, reflecting the use of internally generated funds to help finance expansion. Operating cash flow was negative $58.7 million, typical of build-phase periods but still better than the prior year’s outflow of $265 million.
neville.graham@gleanerjm.com
