GraceKennedy reports improved third-quarter performance

GraceKennedy reports improved third-quarter performance

Sunday, November 10, 2019

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The GraceKennedy Group is reporting improved performance after its nine-month period accumulating net profits of $3.71 billion, representing a marginal increase of 0.1 per cent or $2.04 million over the prior year period.

For the nine-month period, profit before other income was $2.88 billion, 30.2 per cent, or $668.1 million higher than that of the corresponding period last year, indicating an improved operating margin. The group also achieved revenues of $77.03 billion, representing an increase of $3.20 billion or 4.3 per cent compared to the similar period in 2018.

In a release on Thursday, the company's Group Chief Executive Officer (CEO) Don Wehby said they were happy to be reporting the results to shareholders, stating also that they expect to meet their financial targets for 2019.

“We remain focused and are now working on several new and ongoing improvement initiatives across the group, with a view to producing positive results and improving stockholder value,” he noted.

He said GraceKennedy is keeping itself agile and nimble, readying itself for future growth and transformation.

Andrew Messado, chief financial officer (CEO), also announced dividends of $0.40 per stock unit, payable on December 13.

“The group noted that its results were impacted by increases in non-operating expenses as a consequence of the adoption of the new accounting standard on leases — IFRS 16 — and the previously adopted IAS 19 post-employment benefit expenses. Both resulted in a combined negative impact of $489.0 million,” the report also stated.


The report noted further that the food trading division recorded improved revenue and profitability, due to the performance in both its Jamaican and USA food businesses.

“GK's Jamaican foods distribution business experienced growth in both revenue and pre-tax profits, coupled with improved operating margins. Hi-Lo Food Stores showed improved operating performance over the corresponding prior-year period, and the investments in the Catherine's Peak brand of pure spring water and Consumer Brands Limited continue to perform well,” it stated.

The company also reported that its international branches continue to make steady progress and has contributed to the third quarter results.

“GraceKennedy Foods (USA) LLC continues to show improved performance when compared to the corresponding prior-year period, with revenue for the Grace brand growing by double digits — primarily driven by improved sales of Grace frozen patties, Grace Corned Beef, Grace Sardines and Grace Mackerel,” the release stated.

The company's recently opened US$5 million Grace/La Fe distribution facility in Woodbridge, New Jersey, is expected to drive increased operating efficiencies and improve staff and customer satisfaction, the release said.

“Grace Foods Canada Inc has strengthened its distribution presence in Western Canada with additional listings of Grace Jerked Chicken Wings and other frozen products in Sobeys, Canada's second-largest supermarket chain. Grace Foods UK is currently in the process of rolling out plans to re-launch Nurishment, as the company's performance was negatively impacted by the decline in sales of that brand,” the release further stated.

The Grace Kennedy Financial Group Division likewise reported growth in revenues and pre-tax profit for the nine-month period over the last period in 2018.

“In the banking and investments segment, First Global Bank (FGB) opened four Money Link bank agents in the quarter, bringing the total number of agents across Jamaica to eight. The insurance segment continues to perform well, with existing operations achieving growth and various new initiatives forming a base for future growth.”

The company however reported a marginal decline in the money services segment, both in revenue and pre-tax profits, when compared to the previous year.

Wehby however asserted that despite the hiccups, they remain committed to the goal of making GraceKennedy a global consumer group.

“Our results demonstrate that we are steadily making progress on that goal. We are grateful, as always, to our stockholders, employees and customers for their support on our journey,” he said.

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