The Kraft Heinz Company (KHC) swung to a net profit for the quarter ended Oct. 02, 2016. The company has made a net profit of $842 million, or $ 0.69 a share in the quarter, against a net loss of $123 million, or $0.27 a share in the last year period. On an adjusted basis, earnings per share were at $0.83 for the quarter compared with $0.44 in the same period last year. Revenue during the quarter went up marginally by 2.40 percent to $6,267 million from $6,120 million in the previous year period. Gross margin for the quarter expanded 879 basis points over the previous year period to 35.39 percent. Total expenses were 77.45 percent of quarterly revenues, down from 93.48 percent for the same period last year. This has led to an improvement of 1603 basis points in operating margin to 22.55 percent.
Operating income for the quarter was $1,413 million, compared with $399 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $1,803 million compared with $1,482 million in the prior year period. At the same time, adjusted EBITDA margin improved 455 basis points in the quarter to 28.77 percent from 24.22 percent in the last year period.
“Overall, our third quarter results are a good representation of where we are as a company,” said Kraft Heinz Chief executive officer Bernardo Hees. “While our financial performance is respectable, we continue to have the opportunity to improve our offerings and retail execution in several key markets and take our brands to places they don’t currently compete. Our focus now is to finish 2016 strong and set the stage for another year of strong, profitable growth in 2017.”
Working capital turns negative
Working capital of The Kraft Heinz Company has turned negative to $471 million on Oct. 02, 2016 from positive $4,665 million on Sep. 27, 2015. Current ratio was at 0.95 as on Oct. 02, 2016, down from 1.81 on Sep. 27, 2015. Cash conversion cycle (CCC) has decreased to 7 days for the quarter from 18 days for the last year period. Days sales outstanding went down to 15 days for the quarter compared with 20 days for the same period last year.
Days inventory outstanding has decreased to 35 days for the quarter compared with 42 days for the previous year period. At the same time, days payable outstanding went up to 57 days for the quarter from 44 for the same period last year.
Debt increases substantially
The Kraft Heinz Company has witnessed an increase in total debt over the last one year. It stood at $32,680 million as on Oct. 02, 2016, up 29.43 percent or $7,430 million from $25,250 million on Sep. 27, 2015. Short-term debt stood at $2,700 million as on Oct. 02, 2016. Total debt was 26.99 percent of total assets as on Oct. 02, 2016, compared with 20.73 percent on Sep. 27, 2015. Debt to equity ratio was at 0.56 as on Oct. 02, 2016, up from 0.43 as on Sep. 27, 2015. Interest coverage ratio improved to 4.54 for the quarter from 0.87 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
