Business

JBG revenue up, but takes FX hit

Friday, December 14, 2018

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Despite an increase in the second quarter of the financial year, Jamaica Broilers Group (JBG) recorded a dip in profits when compared to results for the same period last year.

“Group revenues for the quarter amounted to $13.6 billion, an 18 per cent increase over the $11.5 billion achieved in the corresponding quarter of the previous year,” stated the interim report signed by Chairman Robert Levy and President and CEO Christopher Levy.

The JBG directors indicated in the report attached to financial statement that the groups market segments all saw upward movement in sales, resulting in the increase in revenue.

“Jamaica operations reported segment result of $1.4 billion, which was $299 million or 28 per cent above last year's segment result of $1.1 billion. This improvement was attributed to increased poultry sales and enhanced inventory management. Total revenue for our Jamaica operations showed an increase of seven per cent.”

In the United States, the acquisition of the Crystal Farms Mills in the state of Georgia contributed significantly to a 20 per cent rise in revenue, the directors wrote, with improved sales from feed, eggs and baby chicks. However, costs related to the acquisition as well as one-off employee costs led to a fall in net profit for that operation.

HAITI UP

“Haiti operations has increased their market share of table eggs to 34 per cent, compared to 31 per cent of the market at the end of the second quarter last year. Total revenue for our Haitian operations increased by 13 per cent over the prior year driven by increased sales of table eggs. The segment result amounted to $85 million, which is $1 million or one per cent below last year's segment result of $86 million,” the interim report revealed, adding that since October 2018 the group increased its holding in Haiti Broilers SA to 72 per cent.

Notwithstanding the gains in revenue, administrative costs rose by 13 per cent over the corresponding period last year. The JBG disclosed that this was “due primarily to exchange movements, salary increases, increased staff complement and distribution costs related to the recent acquisition of the feed mill. These results also include the operating expenses of the new hatchery in Pennsylvania and the costs associated with the formation of the Shareholders' Trust - these costs were not in last year's comparative results.”

Administrative costs for the six months ending October 27, 2018 was $4.2 billion when compared to $3.7 billion in 2017. At the same time finance costs jumped from $311 million for the first six months last year to $471 million in the current financial year.

JBG saw quarter over quarter foreign exchange losses moving from $24.7 million in 2017 to $264 million for this year.

“Our group operates in three different countries and due to significant foreign exchange volatility during the second quarter, we incurred foreign exchange losses of $231 million. These exchange losses resulted in a 47 per cent reduction from profits attributable to stockholders for the quarter ended 28 October 2017. We are anticipating relative stability in foreign exchange as we progress towards the end of our financial year ending April 27, 2019,” the report explained.

Net profit of $231 million fell by 48 per cent from $446 million for the same quarter, whereas half-yearly profits decreased by $14 million to reach $644 million for October 2018.

At the end of six months, total assets grew by $1.3 billion or six per cent to end at $20.7 billion, with cash and cash equivalents increasing year over year by 285 per cent, growing from $912 million in 2017 to the current year to $2.6 billion.

— Josimar Scott

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