Broilers Group reports profit from US operations

Broilers Group reports profit from US operations

BY STEVEN JACKSON Business reporter

Tuesday, December 16, 2014

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Jamaica Broilers Group (JBG) earned more profit from its US operations than any other local division, which signals a shift to hard currency earnings.

At the same time, it announced a sale of shares in its 100 per cent-owned subsidiary, Aquaculture Jamaica Limited (AJL). Calls for clarity went unreturned up to print.

"The sale of shares in AJL was completed this quarter at a transaction value of $90 million," stated Chairman Robert Levy and CEO Chris Levy in a joint statement accompanying the release of financials yesterday.

JBG's operations in the US grew from a small base but rapidly expanded to earn $572 million in profit from $4.6 billion in revenues over six months ending November 2014. This eclipsed its three other segments including the Best Dressed Foods Division, which earned $390 million on $8.2 billion in revenues; HiPro-Ace Division, which earned $310 million profit on $4.2 billion in revenues, and the Ethanol Division, which recorded a $144-million loss from $41 million in revenues.

"The US operations continue to grow and have become a significant contributor to the profits in the group, with good prospects for further growth," the Levys stated in the report, adding that the profit growth in the US increased 183 per cent year-on-year.

The US operations involve the production and sale of fertile eggs and procurement services for customers in North America, Central America and the Caribbean. Last December, JBG announced that it would further expand its burgeoning egg production facility in Georgia, USA, through an acquisition of England Farms in Arkansas, USA.

Despite the prospects of US growth, its ethanol division continues to hold back the group's earnings. Specifically, JBG's net profit hit $99 million for its second quarter ending November 2014, or 43 per cent less than a year earlier.

The Levys also raised concerns about difficult conditions in the domestic economy, including currency devaluation and imports.

"Profits attributable for this quarter were affected by lack of income in the ethanol operation in the first two months, along with general market conditions in Jamaica brought about by the high levels of imported poultry products, tightening of the economy and low consumer spending," the statement read.

The company holds $10.7 billion in shareholder equity up from $9.8 billion a year earlier.

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