Business

GraceKennedy earnings up 21%

Friday, May 16, 2014    

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GRACEKENNEDY saw its earnings climb 21 per cent in the first three months of 2014.

The food and financial services conglomerate posted a net profit of $941 million in its first quarter this year, compared to $776 million in the corresponding period in 2013.

Higher earnings reflected increased revenue, which grew by $2.1 billion or 13 per cent to $18.2 billion during the review period, and stronger performance of the insurance division as well as money services, which benefited from higher inflows of remittances.

But the group's food division saw its profit decline, despite higher revenue that was driven mainly by growth in Europe and Belize.

GraceKennedy group CEO Don Wehby called the current economic environment "challenging", while escalating raw material prices squeezed the Jamaican manufacturing operations.

"Jamaica International Insurance Company's business rebounded significantly with stronger profit performance," said a release issued by GraceKennedy yesterday. "Allied Insurance Brokers (AIB) received a noteworthy boost from employee benefits commissions and the money services segment also experienced strong growth in remittance inflows over the same period last year."

First Global Bank completed the implementation of its new core banking system and online banking platform during the quarter, although a technical issue forced the company to take it offline for a few days last week.

Its sister company, First Global Financial Services was also sold after the end of the first quarter. Proven Investments Limited is to pay $3 billion for the securities dealer.

"The rationale for the divestment was that it would allow the group to reallocate capital in line with its long-term objectives including local and regional expansion in other financial services to generate greater returns for all shareholders," said GraceKennedy.

Hardware & Lumber Limited saw its revenues grow by 17 per cent for the quarter.

"The ensuing quarters will see continued strides in improving our relations with our customers and will ultimately result in greater returns to our shareholders," said Wehby. "We are investing for the future to ensure we deliver on our promise to you, while remaining true to our values of honesty, integrity and trust."

Group CFO Frank James disclosed that on March 3, 2014 the Board of Directors approved an interim dividend of 70 cents per stock unit which was paid on April 30, 2014.

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