Jamaica Broilers Group’s (JBG) quarterly profit dipped 29 per cent to $327 million but the group continues to reduce its debt which resulted in a $119 million net cash-deficit.

The profit but net cash-deficit position of the group saw the stock close two cents higher to $6.80 following the release of the results. Christopher Levy president and chief executive officer told the Observer that the profit dip was due to a fall in ethanol contract processing compared with last year which cut revenues and gross profits.

“One of the real reasons for the decline is that the number of ethanol contracts were down over last year,” he stated.

The net cash position however is negative but has improved due to the refinanced debt relating to its ethanol plant. Its net cash and equivalents at the end January 2010 was $119.3 million in deficit versus a $1.7 billion deficit a year prior. During the quarter financing costs were $110 million compared to $124 million last year show a decrease of $14 million or 11 per cent due to debt restructuring and new financing arrangements.

“If one were to ask where is the cash, the answer is simple it has gone into paying down the debt. It is a strategy of the group to use the cash-flow into reducing debt exposure. It is balance sheet management,” Levy told the Observer.

The long term liabilities stood at $2.1 billion at January 2010 versus $3 billion a year prior.

Levy however added that management would continue to “trust in God’s guidance and seek to further enhance shareholder value”. Earning per share was 27 cents per share versus 38 cents a year prior.

Over nine months ending January 2010 the nearly group doubled its net profit to $1.07 billion from $520.9 million during the prior year’s nine-months.

Segment results over nine months ending January 2010 showed that poultry operations recorded $717.7 million profit from $7.57 billion in revenues, feed & farm supplies made $592.9 million in profit from $5.4 billion in revenues, ethanol operations made $759.7 million profit from $3.3 billion in revenues.

JB Ethanol division is a fuel ethanol dehydration plant located at Port Esquivel in St Catherine. The initial investment of US$20 million in the plant has allowed the group to take advantage of ready markets in the US, Canada, some parts of Central America and CARICOM. the division has a production capacity of 120 million gallons per year of Fuel Grade Ethanol. It has a storage capacity of 25 million gallons, following the erection of storage tanks for raw material and finished product. The plant was commissioned into service in July, 2007.