Business

Fly Jamaica, Russians boosts Goddard's earnings

Friday, February 07, 2014    

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START-UP airline Fly Jamaica and spikes in Russians visitors aided air caterer GCG Jamaica to post improved results for its Barbadian owners, Goddard Enterprises.

The conglomerate also recorded improvements in National Rums of Jamaica but currency movements hurt the performance of Fidelity Motors, its Jamaican-based Nissan car dealership.

"GCG (Jamaica) Limited had a much improved performance as the full impact of its restructuring exercise was realised," stated Goddard in 2013 annual report recently released. "We saw improved business in Montego Bay during the year, mainly attributed to European carriers, including Transaero from Russia. The Kingston Flight Kitchen has benefitted from increased flight activity from Fly Jamaica."

The company however indicated that structurally the airport terminal operations continue to be challenged by a "decline in passenger throughput".

Also, last year GCG launched a catering service beyond the airport serving several high profile weddings as well as corporate and social functions.

Over 10,000 Russians visited the island following the set up of direct flights in 2013.

That market represents the fastest growth area albeit growing from a small base.

Fly Jamaica became the latest local-based airline to offer international flights effective January 2013.

It operates one Boeing 757 aircraft and is a partnership between Guyanese Paul Ronald Reece and Jamaican shareholders including Lloyd Tai.

Goddard operates three main companies in Jamaica but the financial contribution to the group is not disaggregated geographically.

The group made BDS$21 million (US$11 million) of net profit from BDS$962 million of revenue in 2012. The company recovered from a loss of BDS$10.5 million in 2011.

"National Rums of Jamaica was able to overcome some of the issues which caused several production interruptions last year. As a result, the company was able to meet its contractual commitments and produced a much improved result over the prior year," stated Goddard in its 2013 annual report.

Goddard via its subsidiary West Indies Rum Distillery Limited holds a 31 per cent stake in National Rums of Jamaica which also includes the National Sugar Company Limited and Demerara Distillers Limited.

The flagship product is Monymusk Rum.

During the financial year ending September 2013 the local dollar surpassed the $100 to US$1 mark reflecting double-digit depreciation within an already austere economy.

"Fidelity Motors Limited in Jamaica operated in harsh economic conditions and had a challenging year. The value of the Jamaican dollar at year-end decreased by 15 per cent compared to the value at the same time in the previous year. The devaluation, together with an increase in the duties on vehicles and very competitive pricing in the marketplace on new vehicle units, led to a significant decline in profitability compared to prior year," Goddard said.

Goddard owns 99 per cent of Fidelity Motors in Jamaica after acquiring 30 per cent holdings of former partner GraceKennedy Limited in 2009. That deal also resulted in Goddard acquiring GraceKennedy's 51 per cent holdings in Versair In-Flite Services -- later becoming GCG Jamaica.

Fidelity sales increased by 22 per cent in 2012 over 2011 aided in part by duty reductions on some vehicles, according to Goddard in its 2012 financial report. In May 2011, the Government at the time rolled back the Common External Tariff (CET) on car imports from 40 per cent to 20 per cent. Then in June 1, 2012 the CET was upped to 30 per cent. During that period, total car imports hit the highest levels in at least four years.

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