The Kraft Heinz Company (KHC) has reported 46.36 percent jump in profit for the quarter ended Dec. 31, 2016. The company has earned $944 million, or $0.77 a share in the quarter, compared with $645 million, or $0.23 a share for the same period last year. On an adjusted basis, earnings per share were at $0.91 for the quarter compared with $0.62 in the same period last year.
Revenue during the quarter dropped 3.75 percent to $6,857 million from $7,124 million in the previous year period. Gross margin for the quarter expanded 212 basis points over the previous year period to 35.86 percent. Total expenses were 76.96 percent of quarterly revenues, down from 81.93 percent for the same period last year. This has led to an improvement of 498 basis points in operating margin to 23.04 percent.
Operating income for the quarter was $1,580 million, compared with $1,287 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $1,937 million compared with $1,875 million in the prior year period. At the same time, adjusted EBITDA margin improved 193 basis points in the quarter to 28.25 percent from 26.32 percent in the last year period.
"We finished 2016 consistent with our expectations and with good momentum heading into 2017," said Kraft Heinz chief executive officer Bernardo Hees. "Looking forward, our objectives and opportunities are clear. But we need to sharpen our focus on profitable sales, and further improve our capabilities and execution to deliver another year of strong, sustainable growth in 2017."
Working capital turns negative
Working capital of The Kraft Heinz Company has turned negative to $748 million on Dec. 31, 2016 from positive $2,848 million on Jan. 03, 2016. Current ratio was at 0.92 as on Dec. 31, 2016, down from 1.41 on Jan. 03, 2016.
Debt increases substantially
The Kraft Heinz Company has witnessed an increase in total debt over the last one year. It stood at $32,404 million as on Dec. 31, 2016, up 28.41 percent or $7,170 million from $25,234 million on Jan. 03, 2016. Total debt was 26.90 percent of total assets as on Dec. 31, 2016, compared with 20.52 percent on Jan. 03, 2016. Debt to equity ratio was at 0.56 as on Dec. 31, 2016, up from 0.44 as on Jan. 03, 2016. Interest coverage ratio improved to 5.10 for the quarter from 4.84 for the same period last year.
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