While utility costs hurt profitability, AML Foods Limited has persevered with strong sales and new sources of revenue - a trend that's expected to continue.
The top line of the BISX-listed company has received a boost since the opening of Solomon's Fresh Market in western New Providence. The anchor retail outlet for the new Old Fort Bay Town Centre, opened in November of last year, should particularly drive revenue in 2012 and make its presence felt on the bottom line.
This store, combined with its existing businesses, resulted in sales of just under $100 million for 2011, an increase of 7 percent over 2010.
According to its financial results for the year, the company recorded a net profit of $1.2 million in the fourth quarter, compared to $1.4 million during the same period in the previous year.
Gavin Watchorn, the CEO of AML foods, expects the company to generate improved profitability in the first quarter despite a persistent struggle with power costs.
"We're working our way through the investment program to reduce it," he said. "We have a firm strategy and looking at what we can do to control it ourselves, which is looking at the lights, refrigeration and other areas. We have to look at knocking it off with our return of investment."
In fact, AML Foods is pouring at least $1 million into energy efficiency for 2012.
Utility costs, according to the company's financial results for 2011, have risen 20 percent every year. This expenditure has gone up $1.2 million since 2009, Watchorn pointed out.
However, in tandem with energy efficiency projects, the company is also poised for further expansion, and hopefully, he said, more sources of revenue.
A new Solomon's, taking over the old City market in Seahorse Shopping Center in Grand Bahama, is on schedule and ready for its summer opening, according to Watchorn.
He revealed to Guardian Business that much of the senior personnel have already been hired for the store, with significant hirings for other positions expected to be ongoing.
AML Foods is spending nearly $4 million on renovations to the property.
Watchorn added that the Solomon's should open sometime in July, with equipment now rolling in. Outfitting the location will require an investment in energy efficient products, he explained.
"The biggest culprit is refrigeration, followed by air conditioning and lighting," Watchorn said.
The new store is targeting up to $15 million in sales within 36 months.
The other expansion project on the horizon is the introduction of Carl's Jr. to the Bahamian franchise scene. AML Foods came to an agreement with the American company early this year. Guardian Business understands an announcement of the franchise's first location should be made soon.
The long-term investment for AML Foods should be in the range of $4 million, envisioning up to five Carl's Jr. outlets over the next several years.
"The attraction to this is we think it will be a profitable business in its own right," he told Guardian Business. "We have a lot of existing infrastructure in place. We have logistics and back office staff, so our learning curve is not as steep. That's a great benefit to us and a strength. We'll be able to share costs with other parts of the company, such as Domino's, and yet generate a wider sales base."

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