Profits and revenues up for GraceKennedy six-month period

Business

Profits and revenues up for GraceKennedy six-month period

Sunday, August 02, 2020

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GraceKennedy (GK) Group on Thursday last reported an unaudited net profit of $3.1 billion for the six-month period ended June 30, 2020, representing a 34.3 per cent increase when compared with the previous corresponding period.

The Group also achieved revenues of $56.5 billion, an increase of $5 billion or 9.8 per cent when compared with the corresponding period last year, and a $4.56 billion profit from operations, up 60.5 per cent.

This performance, according to Group CEO Don Wehby, is attributable to improved margin management, as well as increased focus on operational efficiency and cost containment.

“These measures will continue for the rest of the year given the magnitude of the spread of COVID-19 and its impact on the economies in which we operate and our consumers,” Wehby added.

Both GK's local and international food businesses reported noteworthy results for the first half of 2020, with the Jamaican foods distribution company continuing to realise positive results from a strong product mix and improved margins.

This growth was influenced by strong demand for Grace Foods' key products, and an improved supply of raw materials bolstered by the harvesting of the GK Agro Park's first crop. Grace Foods also improved its operational efficiency, with the commissioning of its first on-site, liquefied natural gas (LNG) plant at its meat processing factory in Westmoreland.

The LNG plant has reduced GK's dependency on heavy fuel, with associated environmental benefits.

GraceKennedy Foods (USA) LLC and Grace Foods Canada both recorded strong performances, while Grace Foods UK achieved improved margins associated with the successful implementation of strategic initiatives, including improved revenues from its nurishment brand.

Concurrently, GraceKennedy Financial Group (GKFG) realised growth in revenues and profit compared to the corresponding period of 2019, despite being impacted by additional impairment provisions related to loans receivable under IFRS 9, and credit risk associated with COVID-19.

According to the company, GKFG's money services segment registered an increase in both revenue and pre-tax profit, compared to the period in the prior year, and leveraged opportunities presented by the COVID-19 pandemic to drive the adoption of digital channels. This led to significant growth in transaction volumes from these channels.

In line with GK Group's digital transformation strategy and its response to the pandemic, GKONE Digital, Jamaica's first cashless financial services store, was opened on Harbour Street, downtown Kingston, in July. The new one-stop shop provides cashless financial services, including banking, insurance, bill payment, remittance, consumer loans and cambio services all at one location.

GK's insurance and banking and investment segments also reported growth in revenue during the period under review.

First Global Bank sustained growth in its loan and deposit portfolios, and in collaboration with GK Money Services, successfully established several thousand accounts for beneficiaries of the COVID Allocation of Resources for Employees (CARE) Programme.

GK Group Chief Financial Officer Andrew Messado announced a dividend payment of 40 cents per stock unit, payable on September 24, 2020, totalling approximately $396 million. As at June 30, earnings per stock unit stood at $2.77.

“The outlook for the remainder of 2020 is unclear, and we anticipate that the second half of the year could see reduced consumer spending as a result of diminished, disposable income. Despite this, GK remains positive and committed to delivering our products and service with quality. We will continue to manage the business prudently in this environment, for the benefit of our stakeholders,” Wehby affirmed.

— Abbion Robinson


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